Correlation Between CNB Financial and Security Bank
Can any of the company-specific risk be diversified away by investing in both CNB Financial and Security Bank 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 CNB Financial and Security Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNB Financial and Security Bank, you can compare the effects of market volatilities on CNB Financial and Security Bank 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 CNB Financial with a short position of Security Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNB Financial and Security Bank.
Diversification Opportunities for CNB Financial and Security Bank
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CNB and Security is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CNB Financial and Security Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank and CNB 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 CNB Financial are associated (or correlated) with Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank has no effect on the direction of CNB Financial i.e., CNB Financial and Security Bank go up and down completely randomly.
Pair Corralation between CNB Financial and Security Bank
If you would invest 151.00 in Security Bank on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Security Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
CNB Financial vs. Security Bank
Performance |
| Timeline |
| CNB Financial |
| Security Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CNB Financial and Security Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNB Financial and Security Bank
The main advantage of trading using opposite CNB Financial and Security Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNB Financial position performs unexpectedly, Security Bank 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 Security Bank will offset losses from the drop in Security Bank's long position.| CNB Financial vs. Finward Bancorp | CNB Financial vs. Great Southern Bancorp | CNB Financial vs. First Mid Illinois | CNB Financial vs. Franklin Financial Services |
| Security Bank vs. Merchants Marine Bancorp | Security Bank vs. First Bancorp | Security Bank vs. CNB Financial | Security Bank vs. MNB Holdings Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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