Correlation Between Apollo Bancorp and CNB
Can any of the company-specific risk be diversified away by investing in both Apollo Bancorp and CNB 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 Apollo Bancorp and CNB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Bancorp and CNB Corporation, you can compare the effects of market volatilities on Apollo Bancorp and CNB 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 Apollo Bancorp with a short position of CNB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Bancorp and CNB.
Diversification Opportunities for Apollo Bancorp and CNB
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apollo and CNB is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Bancorp and CNB Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNB Corporation and Apollo 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 Apollo Bancorp are associated (or correlated) with CNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNB Corporation has no effect on the direction of Apollo Bancorp i.e., Apollo Bancorp and CNB go up and down completely randomly.
Pair Corralation between Apollo Bancorp and CNB
Given the investment horizon of 90 days Apollo Bancorp is expected to generate 0.4 times more return on investment than CNB. However, Apollo Bancorp is 2.53 times less risky than CNB. It trades about 0.24 of its potential returns per unit of risk. CNB Corporation is currently generating about -0.36 per unit of risk. If you would invest 3,647 in Apollo Bancorp on September 3, 2024 and sell it today you would earn a total of 53.00 from holding Apollo Bancorp or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apollo Bancorp vs. CNB Corp.
Performance |
| Timeline |
| Apollo Bancorp |
| CNB Corporation |
Apollo Bancorp and CNB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Bancorp and CNB
The main advantage of trading using opposite Apollo Bancorp and CNB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Bancorp position performs unexpectedly, CNB 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 CNB will offset losses from the drop in CNB's long position.| Apollo Bancorp vs. First Hawaiian | Apollo Bancorp vs. Central Pacific Financial | Apollo Bancorp vs. Territorial Bancorp | Apollo Bancorp vs. Comerica |
| CNB vs. Eastern Michigan Financial | CNB vs. Commercial National Financial | CNB vs. Mifflinburg Bancorp | CNB vs. Apollo Bancorp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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