Correlation Between CBB Bancorp and Madison County
Can any of the company-specific risk be diversified away by investing in both CBB Bancorp and Madison County 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 CBB Bancorp and Madison County into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBB Bancorp and Madison County Financial, you can compare the effects of market volatilities on CBB Bancorp and Madison County 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 CBB Bancorp with a short position of Madison County. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBB Bancorp and Madison County.
Diversification Opportunities for CBB Bancorp and Madison County
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CBB and Madison is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CBB Bancorp and Madison County Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison County Financial and CBB 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 CBB Bancorp are associated (or correlated) with Madison County. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison County Financial has no effect on the direction of CBB Bancorp i.e., CBB Bancorp and Madison County go up and down completely randomly.
Pair Corralation between CBB Bancorp and Madison County
If you would invest 2,936 in Madison County Financial on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Madison County Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBB Bancorp vs. Madison County Financial
Performance |
| Timeline |
| CBB Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Madison County Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CBB Bancorp and Madison County Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBB Bancorp and Madison County
The main advantage of trading using opposite CBB Bancorp and Madison County positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBB Bancorp position performs unexpectedly, Madison County 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 Madison County will offset losses from the drop in Madison County's long position.| CBB Bancorp vs. CIB Marine Bancshares | CBB Bancorp vs. United Bancorporation of | CBB Bancorp vs. U I Financial | CBB Bancorp vs. Heartland Banccorp |
| Madison County vs. Bank of San | Madison County vs. Citizens Bancorp of | Madison County vs. First Ottawa Bancshares | Madison County vs. Mountain Commerce 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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