Correlation Between CB Financial and Parke Bancorp
Can any of the company-specific risk be diversified away by investing in both CB Financial and Parke Bancorp 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 Parke Bancorp 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 Parke Bancorp, you can compare the effects of market volatilities on CB Financial and Parke Bancorp 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 Parke Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Financial and Parke Bancorp.
Diversification Opportunities for CB Financial and Parke Bancorp
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CBFV and Parke is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CB Financial Services and Parke Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parke 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 Parke Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parke Bancorp has no effect on the direction of CB Financial i.e., CB Financial and Parke Bancorp go up and down completely randomly.
Pair Corralation between CB Financial and Parke Bancorp
Given the investment horizon of 90 days CB Financial Services is expected to generate 0.74 times more return on investment than Parke Bancorp. However, CB Financial Services is 1.35 times less risky than Parke Bancorp. It trades about 0.09 of its potential returns per unit of risk. Parke Bancorp is currently generating about 0.06 per unit of risk. If you would invest 1,982 in CB Financial Services on September 1, 2024 and sell it today you would earn a total of 1,217 from holding CB Financial Services or generate 61.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.46% |
| Values | Daily Returns |
CB Financial Services vs. Parke Bancorp
Performance |
| Timeline |
| CB Financial Services |
| Parke Bancorp |
CB Financial and Parke Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Financial and Parke Bancorp
The main advantage of trading using opposite CB Financial and Parke Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Financial position performs unexpectedly, Parke Bancorp 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 Parke Bancorp will offset losses from the drop in Parke Bancorp'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 |
| Parke Bancorp vs. Sound Financial Bancorp | Parke Bancorp vs. Finward Bancorp | Parke Bancorp vs. Franklin Financial Services | Parke Bancorp vs. Community West Bancshares |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |