Correlation Between Community Investors and CMUV Bancorp
Can any of the company-specific risk be diversified away by investing in both Community Investors and CMUV Bancorp 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 Community Investors and CMUV Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Community Investors Bancorp and CMUV Bancorp, you can compare the effects of market volatilities on Community Investors and CMUV Bancorp 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 Community Investors with a short position of CMUV Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community Investors and CMUV Bancorp.
Diversification Opportunities for Community Investors and CMUV Bancorp
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Community and CMUV is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Community Investors Bancorp and CMUV Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMUV Bancorp and Community Investors 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 Community Investors Bancorp are associated (or correlated) with CMUV Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMUV Bancorp has no effect on the direction of Community Investors i.e., Community Investors and CMUV Bancorp go up and down completely randomly.
Pair Corralation between Community Investors and CMUV Bancorp
Given the investment horizon of 90 days Community Investors is expected to generate 1.05 times less return on investment than CMUV Bancorp. But when comparing it to its historical volatility, Community Investors Bancorp is 5.64 times less risky than CMUV Bancorp. It trades about 0.29 of its potential returns per unit of risk. CMUV Bancorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,470 in CMUV Bancorp on August 28, 2024 and sell it today you would earn a total of 630.00 from holding CMUV Bancorp or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 6.8% |
| Values | Daily Returns |
Community Investors Bancorp vs. CMUV Bancorp
Performance |
| Timeline |
| Community Investors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CMUV Bancorp |
Community Investors and CMUV Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Community Investors and CMUV Bancorp
The main advantage of trading using opposite Community Investors and CMUV Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community Investors position performs unexpectedly, CMUV Bancorp 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 CMUV Bancorp will offset losses from the drop in CMUV Bancorp's long position.| Community Investors vs. CIB Marine Bancshares | Community Investors vs. United Bancorporation of | Community Investors vs. U I Financial | Community Investors vs. CoastalSouth Bancshares |
| CMUV Bancorp vs. Pioneer Bankcorp | CMUV Bancorp vs. Summit Bancshares | CMUV Bancorp vs. Liberty Northwest Bancorp | CMUV Bancorp vs. First Community |
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 Stocks Directory module to find actively traded stocks across global markets.
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