Correlation Between ACNB and CKX Lands

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Can any of the company-specific risk be diversified away by investing in both ACNB and CKX Lands 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 ACNB and CKX Lands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACNB Corporation and CKX Lands, you can compare the effects of market volatilities on ACNB and CKX Lands 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 ACNB with a short position of CKX Lands. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACNB and CKX Lands.

Diversification Opportunities for ACNB and CKX Lands

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between ACNB and CKX is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ACNB Corp. and CKX Lands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKX Lands and ACNB 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 ACNB Corporation are associated (or correlated) with CKX Lands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKX Lands has no effect on the direction of ACNB i.e., ACNB and CKX Lands go up and down completely randomly.

Pair Corralation between ACNB and CKX Lands

Given the investment horizon of 90 days ACNB is expected to generate 20.87 times less return on investment than CKX Lands. But when comparing it to its historical volatility, ACNB Corporation is 30.67 times less risky than CKX Lands. It trades about 0.12 of its potential returns per unit of risk. CKX Lands is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,383  in CKX Lands on August 24, 2024 and sell it today you would lose (132.00) from holding CKX Lands or give up 9.54% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy91.2%
ValuesDaily Returns

ACNB Corp.  vs.  CKX Lands

 Performance 
       Timeline  
ACNB 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in ACNB Corporation are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ACNB sustained solid returns over the last few months and may actually be approaching a breakup point.
CKX Lands 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CKX Lands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ACNB and CKX Lands Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ACNB and CKX Lands

The main advantage of trading using opposite ACNB and CKX Lands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACNB position performs unexpectedly, CKX Lands 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 CKX Lands will offset losses from the drop in CKX Lands' long position.
The idea behind ACNB Corporation and CKX Lands 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.
Check out your portfolio center.
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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