Correlation Between CB Financial and Civista Bancshares
Can any of the company-specific risk be diversified away by investing in both CB Financial and Civista Bancshares 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 CB Financial and Civista Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CB Financial Services and Civista Bancshares, you can compare the effects of market volatilities on CB Financial and Civista Bancshares 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 CB Financial with a short position of Civista Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Financial and Civista Bancshares.
Diversification Opportunities for CB Financial and Civista Bancshares
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CBFV and Civista is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CB Financial Services and Civista Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civista Bancshares and CB Financial 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 CB Financial Services are associated (or correlated) with Civista Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civista Bancshares has no effect on the direction of CB Financial i.e., CB Financial and Civista Bancshares go up and down completely randomly.
Pair Corralation between CB Financial and Civista Bancshares
Given the investment horizon of 90 days CB Financial Services is expected to generate 0.79 times more return on investment than Civista Bancshares. However, CB Financial Services is 1.27 times less risky than Civista Bancshares. It trades about 0.09 of its potential returns per unit of risk. Civista Bancshares is currently generating about 0.07 per unit of risk. If you would invest 1,758 in CB Financial Services on August 27, 2024 and sell it today you would earn a total of 1,242 from holding CB Financial Services or generate 70.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.46% |
| Values | Daily Returns |
CB Financial Services vs. Civista Bancshares
Performance |
| Timeline |
| CB Financial Services |
| Civista Bancshares |
CB Financial and Civista Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Financial and Civista Bancshares
The main advantage of trading using opposite CB Financial and Civista Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Financial position performs unexpectedly, Civista Bancshares 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 Civista Bancshares will offset losses from the drop in Civista Bancshares' long position.| CB Financial vs. Fifth Third Bancorp | CB Financial vs. Zions Bancorporation | CB Financial vs. Huntington Bancshares Incorporated | CB Financial vs. Comerica |
| Civista Bancshares vs. Fifth Third Bancorp | Civista Bancshares vs. Zions Bancorporation | Civista Bancshares vs. Huntington Bancshares Incorporated | Civista Bancshares vs. Comerica |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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