Correlation Between CF Bankshares and Mid Southern
Can any of the company-specific risk be diversified away by investing in both CF Bankshares and Mid Southern 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 CF Bankshares and Mid Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Bankshares and Mid Southern Bancorp, you can compare the effects of market volatilities on CF Bankshares and Mid Southern 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 CF Bankshares with a short position of Mid Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Bankshares and Mid Southern.
Diversification Opportunities for CF Bankshares and Mid Southern
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CFBK and Mid is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding CF Bankshares and Mid Southern Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Southern Bancorp and CF Bankshares 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 CF Bankshares are associated (or correlated) with Mid Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Southern Bancorp has no effect on the direction of CF Bankshares i.e., CF Bankshares and Mid Southern go up and down completely randomly.
Pair Corralation between CF Bankshares and Mid Southern
If you would invest 1,831 in CF Bankshares on September 3, 2024 and sell it today you would earn a total of 991.00 from holding CF Bankshares or generate 54.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.69% |
| Values | Daily Returns |
CF Bankshares vs. Mid Southern Bancorp
Performance |
| Timeline |
| CF Bankshares |
| Mid Southern Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CF Bankshares and Mid Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Bankshares and Mid Southern
The main advantage of trading using opposite CF Bankshares and Mid Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Bankshares position performs unexpectedly, Mid Southern 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 Mid Southern will offset losses from the drop in Mid Southern's long position.| CF Bankshares vs. JPMorgan Chase Co | CF Bankshares vs. Citigroup | CF Bankshares vs. Wells Fargo | CF Bankshares vs. Toronto Dominion Bank |
| Mid Southern vs. Community West Bancshares | Mid Southern vs. First Financial Northwest | Mid Southern vs. CF Bankshares | Mid Southern vs. Home Federal 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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