Correlation Between CB Financial and Greene County
Can any of the company-specific risk be diversified away by investing in both CB Financial and Greene 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 CB Financial and Greene County 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 Greene County Bancorp, you can compare the effects of market volatilities on CB Financial and Greene 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 CB Financial with a short position of Greene County. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Financial and Greene County.
Diversification Opportunities for CB Financial and Greene County
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between CBFV and Greene is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding CB Financial Services and Greene County Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greene County Bancorp 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 Greene County. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greene County Bancorp has no effect on the direction of CB Financial i.e., CB Financial and Greene County go up and down completely randomly.
Pair Corralation between CB Financial and Greene County
Given the investment horizon of 90 days CB Financial Services is expected to generate 0.29 times more return on investment than Greene County. However, CB Financial Services is 3.44 times less risky than Greene County. It trades about 0.33 of its potential returns per unit of risk. Greene County Bancorp is currently generating about 0.08 per unit of risk. If you would invest 2,835 in CB Financial Services on August 30, 2024 and sell it today you would earn a total of 321.00 from holding CB Financial Services or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CB Financial Services vs. Greene County Bancorp
Performance |
| Timeline |
| CB Financial Services |
| Greene County Bancorp |
CB Financial and Greene County Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Financial and Greene County
The main advantage of trading using opposite CB Financial and Greene County positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Financial position performs unexpectedly, Greene 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 Greene County will offset losses from the drop in Greene County's long position.| CB Financial vs. Magyar Bancorp | CB Financial vs. Home Federal Bancorp | CB Financial vs. Community West Bancshares | CB Financial vs. Lake Shore Bancorp |
| Greene County vs. Community West Bancshares | Greene County vs. First Northwest Bancorp | Greene County vs. Home Federal Bancorp | Greene County vs. First Financial Northwest |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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