Correlation Between Croghan Bancshares and Community First
Can any of the company-specific risk be diversified away by investing in both Croghan Bancshares and Community First 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 Community First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Croghan Bancshares and Community First Bancorporation, you can compare the effects of market volatilities on Croghan Bancshares and Community First 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 Community First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Croghan Bancshares and Community First.
Diversification Opportunities for Croghan Bancshares and Community First
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Croghan and Community is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Croghan Bancshares and Community First Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community First Banc 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 Community First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community First Banc has no effect on the direction of Croghan Bancshares i.e., Croghan Bancshares and Community First go up and down completely randomly.
Pair Corralation between Croghan Bancshares and Community First
Given the investment horizon of 90 days Croghan Bancshares is expected to generate 3.03 times less return on investment than Community First. But when comparing it to its historical volatility, Croghan Bancshares is 2.08 times less risky than Community First. It trades about 0.05 of its potential returns per unit of risk. Community First Bancorporation is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 605.00 in Community First Bancorporation on September 4, 2024 and sell it today you would earn a total of 195.00 from holding Community First Bancorporation or generate 32.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 75.7% |
| Values | Daily Returns |
Croghan Bancshares vs. Community First Bancorp.
Performance |
| Timeline |
| Croghan Bancshares |
| Community First Banc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Croghan Bancshares and Community First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Croghan Bancshares and Community First
The main advantage of trading using opposite Croghan Bancshares and Community First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Croghan Bancshares position performs unexpectedly, Community First 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 Community First will offset losses from the drop in Community First's long position.| Croghan Bancshares vs. Consol Energy | Croghan Bancshares vs. Dave Busters Entertainment | Croghan Bancshares vs. Xponential Fitness | Croghan Bancshares vs. Eldorado Gold Corp |
| Community First vs. Citizens Financial Corp | Community First vs. Croghan Bancshares | Community First vs. Commercial National Financial | Community First vs. CCFNB 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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