Correlation Between Consumers Bancorp and CCFNB Bancorp
Can any of the company-specific risk be diversified away by investing in both Consumers Bancorp and CCFNB 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 Consumers Bancorp and CCFNB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consumers Bancorp and CCFNB Bancorp, you can compare the effects of market volatilities on Consumers Bancorp and CCFNB 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 Consumers Bancorp with a short position of CCFNB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consumers Bancorp and CCFNB Bancorp.
Diversification Opportunities for Consumers Bancorp and CCFNB Bancorp
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Consumers and CCFNB is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Consumers Bancorp and CCFNB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCFNB Bancorp and Consumers 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 Consumers Bancorp are associated (or correlated) with CCFNB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCFNB Bancorp has no effect on the direction of Consumers Bancorp i.e., Consumers Bancorp and CCFNB Bancorp go up and down completely randomly.
Pair Corralation between Consumers Bancorp and CCFNB Bancorp
Given the investment horizon of 90 days Consumers Bancorp is expected to generate 1.03 times less return on investment than CCFNB Bancorp. But when comparing it to its historical volatility, Consumers Bancorp is 1.56 times less risky than CCFNB Bancorp. It trades about 0.05 of its potential returns per unit of risk. CCFNB Bancorp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,459 in CCFNB Bancorp on September 3, 2024 and sell it today you would earn a total of 391.00 from holding CCFNB Bancorp or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.76% |
| Values | Daily Returns |
Consumers Bancorp vs. CCFNB Bancorp
Performance |
| Timeline |
| Consumers Bancorp |
| CCFNB Bancorp |
Consumers Bancorp and CCFNB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consumers Bancorp and CCFNB Bancorp
The main advantage of trading using opposite Consumers Bancorp and CCFNB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consumers Bancorp position performs unexpectedly, CCFNB 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 CCFNB Bancorp will offset losses from the drop in CCFNB Bancorp's long position.| Consumers Bancorp vs. Century Next Financial | Consumers Bancorp vs. Citizens Financial Corp | Consumers Bancorp vs. Triad Business Bank | Consumers Bancorp vs. First Ottawa Bancshares |
| CCFNB Bancorp vs. Susquehanna Community Financial | CCFNB Bancorp vs. Mifflinburg Bancorp | CCFNB Bancorp vs. Woodlands Financial Services | CCFNB Bancorp vs. Penns Woods 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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