Correlation Between Croghan Bancshares and Commercial National
Can any of the company-specific risk be diversified away by investing in both Croghan Bancshares and Commercial 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 Croghan Bancshares and Commercial National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Croghan Bancshares and Commercial National Financial, you can compare the effects of market volatilities on Croghan Bancshares and Commercial 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 Croghan Bancshares with a short position of Commercial National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Croghan Bancshares and Commercial National.
Diversification Opportunities for Croghan Bancshares and Commercial National
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Croghan and Commercial is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Croghan Bancshares and Commercial National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial National and Croghan Bancshares 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 Croghan Bancshares are associated (or correlated) with Commercial National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial National has no effect on the direction of Croghan Bancshares i.e., Croghan Bancshares and Commercial National go up and down completely randomly.
Pair Corralation between Croghan Bancshares and Commercial National
Given the investment horizon of 90 days Croghan Bancshares is expected to generate 2.12 times less return on investment than Commercial National. But when comparing it to its historical volatility, Croghan Bancshares is 1.33 times less risky than Commercial National. It trades about 0.04 of its potential returns per unit of risk. Commercial National Financial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 774.00 in Commercial National Financial on September 3, 2024 and sell it today you would earn a total of 201.00 from holding Commercial National Financial or generate 25.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Croghan Bancshares vs. Commercial National Financial
Performance |
| Timeline |
| Croghan Bancshares |
| Commercial National |
Croghan Bancshares and Commercial National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Croghan Bancshares and Commercial National
The main advantage of trading using opposite Croghan Bancshares and Commercial National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Croghan Bancshares position performs unexpectedly, Commercial 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 Commercial National will offset losses from the drop in Commercial National's long position.| Croghan Bancshares vs. PGE Corp | Croghan Bancshares vs. Empresa Distribuidora y | Croghan Bancshares vs. Artisan Partners Asset | Croghan Bancshares vs. WEC Energy Group |
| Commercial National vs. Eastern Michigan Financial | Commercial National vs. Mifflinburg Bancorp | Commercial National vs. Apollo Bancorp | Commercial National vs. Community Bankers |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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