Correlation Between CNB Financial and Old National
Can any of the company-specific risk be diversified away by investing in both CNB Financial and Old National 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 Old National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNB Financial and Old National Bancorp, you can compare the effects of market volatilities on CNB Financial and Old National 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 Old National. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNB Financial and Old National.
Diversification Opportunities for CNB Financial and Old National
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CNB and Old is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CNB Financial and Old National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old National Bancorp 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 Old National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old National Bancorp has no effect on the direction of CNB Financial i.e., CNB Financial and Old National go up and down completely randomly.
Pair Corralation between CNB Financial and Old National
Assuming the 90 days horizon CNB Financial is expected to generate 1.29 times more return on investment than Old National. However, CNB Financial is 1.29 times more volatile than Old National Bancorp. It trades about 0.23 of its potential returns per unit of risk. Old National Bancorp is currently generating about 0.01 per unit of risk. If you would invest 2,397 in CNB Financial on August 31, 2024 and sell it today you would earn a total of 98.00 from holding CNB Financial or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNB Financial vs. Old National Bancorp
Performance |
| Timeline |
| CNB Financial |
| Old National Bancorp |
CNB Financial and Old National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNB Financial and Old National
The main advantage of trading using opposite CNB Financial and Old National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNB Financial position performs unexpectedly, Old National 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 Old National will offset losses from the drop in Old National's long position.| CNB Financial vs. KeyCorp | CNB Financial vs. KeyCorp | CNB Financial vs. Fifth Third Bancorp | CNB Financial vs. Citizens Financial Group |
| Old National vs. Old National Bancorp | Old National vs. Washington Federal | Old National vs. Heartland Financial USA | Old National vs. CNB Financial |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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