Correlation Between Colony Bankcorp and Oconee Federal
Can any of the company-specific risk be diversified away by investing in both Colony Bankcorp and Oconee Federal 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 Colony Bankcorp and Oconee Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colony Bankcorp and Oconee Federal Financial, you can compare the effects of market volatilities on Colony Bankcorp and Oconee Federal 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 Colony Bankcorp with a short position of Oconee Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colony Bankcorp and Oconee Federal.
Diversification Opportunities for Colony Bankcorp and Oconee Federal
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Colony and Oconee is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Colony Bankcorp and Oconee Federal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oconee Federal Financial and Colony Bankcorp 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 Colony Bankcorp are associated (or correlated) with Oconee Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oconee Federal Financial has no effect on the direction of Colony Bankcorp i.e., Colony Bankcorp and Oconee Federal go up and down completely randomly.
Pair Corralation between Colony Bankcorp and Oconee Federal
Given the investment horizon of 90 days Colony Bankcorp is expected to generate 0.6 times more return on investment than Oconee Federal. However, Colony Bankcorp is 1.66 times less risky than Oconee Federal. It trades about 0.04 of its potential returns per unit of risk. Oconee Federal Financial is currently generating about -0.11 per unit of risk. If you would invest 1,182 in Colony Bankcorp on October 21, 2024 and sell it today you would earn a total of 402.00 from holding Colony Bankcorp or generate 34.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 24.6% |
| Values | Daily Returns |
Colony Bankcorp vs. Oconee Federal Financial
Performance |
| Timeline |
| Colony Bankcorp |
| Oconee Federal Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Colony Bankcorp and Oconee Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colony Bankcorp and Oconee Federal
The main advantage of trading using opposite Colony Bankcorp and Oconee Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colony Bankcorp position performs unexpectedly, Oconee Federal 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 Oconee Federal will offset losses from the drop in Oconee Federal's long position.| Colony Bankcorp vs. Home Federal Bancorp | Colony Bankcorp vs. First Financial Northwest | Colony Bankcorp vs. First Northwest Bancorp | Colony Bankcorp vs. First Capital |
| Oconee Federal vs. Home Federal Bancorp | Oconee Federal vs. Community West Bancshares | Oconee Federal vs. Magyar 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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