Correlation Between Cadence Bancorp and Commerce Bancshares

Can any of the company-specific risk be diversified away by investing in both Cadence Bancorp and Commerce Bancshares at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cadence Bancorp and Commerce Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cadence Bancorp and Commerce Bancshares, you can compare the effects of market volatilities on Cadence Bancorp and Commerce Bancshares and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cadence Bancorp with a short position of Commerce Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadence Bancorp and Commerce Bancshares.

Diversification Opportunities for Cadence Bancorp and Commerce Bancshares

0.07

Correlation Coefficient

Cadence Bancorp  Commerce Bancshares

Significant diversification

The 3 months correlation between Cadence and Commerce is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cadence Bancorp and Commerce Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerce Bancshares and Cadence Bancorp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cadence Bancorp are associated (or correlated) with Commerce Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerce Bancshares has no effect on the direction of Cadence Bancorp i.e., Cadence Bancorp and Commerce Bancshares go up and down completely randomly.

Pair Corralation between Cadence Bancorp and Commerce Bancshares

Given the investment horizon of 90 days Cadence Bancorp is expected to generate 1.23 times more return on investment than Commerce Bancshares. However, Cadence Bancorp is 1.23 times more volatile than Commerce Bancshares. It trades about 0.05 of its potential returns per unit of risk. Commerce Bancshares is currently generating about -0.14 per unit of risk. If you would invest  3,726  in Cadence Bancorp on August 26, 2025 and sell it today you would earn a total of  170.00  from holding Cadence Bancorp or generate 4.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cadence Bancorp  vs.  Commerce Bancshares

Cadence Bancorp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Cadence Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Cadence Bancorp is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Commerce Bancshares

Risk-Adjusted Performance

Weakest

Over the last 90 days Commerce Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Cadence Bancorp and Commerce Bancshares

The main advantage of trading using opposite Cadence Bancorp and Commerce Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadence Bancorp position performs unexpectedly, Commerce Bancshares can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Commerce Bancshares will offset losses from the drop in Commerce Bancshares' long position.

The idea behind Cadence Bancorp and Commerce Bancshares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..