Correlation Between Cambridge Bancorp and Community Financial
Can any of the company-specific risk be diversified away by investing in both Cambridge Bancorp and Community Financial 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 Cambridge Bancorp and Community Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambridge Bancorp and Community Financial Corp, you can compare the effects of market volatilities on Cambridge Bancorp and Community Financial 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 Cambridge Bancorp with a short position of Community Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambridge Bancorp and Community Financial.
Diversification Opportunities for Cambridge Bancorp and Community Financial
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cambridge and Community is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cambridge Bancorp and Community Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Financial Corp and Cambridge 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 Cambridge Bancorp are associated (or correlated) with Community Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Financial Corp has no effect on the direction of Cambridge Bancorp i.e., Cambridge Bancorp and Community Financial go up and down completely randomly.
Pair Corralation between Cambridge Bancorp and Community Financial
If you would invest 5,270 in Cambridge Bancorp on September 12, 2024 and sell it today you would earn a total of 2,089 from holding Cambridge Bancorp or generate 39.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.44% |
| Values | Daily Returns |
Cambridge Bancorp vs. Community Financial Corp
Performance |
| Timeline |
| Cambridge Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Community Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cambridge Bancorp and Community Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambridge Bancorp and Community Financial
The main advantage of trading using opposite Cambridge Bancorp and Community Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambridge Bancorp position performs unexpectedly, Community Financial 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 Community Financial will offset losses from the drop in Community Financial's long position.| Cambridge Bancorp vs. First Community | Cambridge Bancorp vs. Community West Bancshares | Cambridge Bancorp vs. First Financial Northwest | Cambridge Bancorp vs. First Northwest Bancorp |
| Community Financial vs. Southern Missouri Bancorp | Community Financial vs. Western New England | Community Financial vs. First Community | Community Financial vs. SB Financial Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |