Correlation Between CNB and FS Bancorp
Can any of the company-specific risk be diversified away by investing in both CNB and FS 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 CNB and FS Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNB Corporation and FS Bancorp, you can compare the effects of market volatilities on CNB and FS 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 CNB with a short position of FS Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNB and FS Bancorp.
Diversification Opportunities for CNB and FS Bancorp
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CNB and FXLG is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding CNB Corp. and FS Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS Bancorp and CNB 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 Corporation are associated (or correlated) with FS Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS Bancorp has no effect on the direction of CNB i.e., CNB and FS Bancorp go up and down completely randomly.
Pair Corralation between CNB and FS Bancorp
Given the investment horizon of 90 days CNB Corporation is expected to under-perform the FS Bancorp. In addition to that, CNB is 2.25 times more volatile than FS Bancorp. It trades about -0.41 of its total potential returns per unit of risk. FS Bancorp is currently generating about 0.21 per unit of volatility. If you would invest 3,100 in FS Bancorp on August 29, 2024 and sell it today you would earn a total of 50.00 from holding FS Bancorp or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNB Corp. vs. FS Bancorp
Performance |
| Timeline |
| CNB Corporation |
| FS Bancorp |
CNB and FS Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNB and FS Bancorp
The main advantage of trading using opposite CNB and FS Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNB position performs unexpectedly, FS 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 FS Bancorp will offset losses from the drop in FS Bancorp's long position.| CNB vs. Israel Discount Bank | CNB vs. Baraboo Bancorporation | CNB vs. Danske Bank AS | CNB vs. Jyske Bank AS |
| FS Bancorp vs. Eastern Michigan Financial | FS Bancorp vs. Grand River Commerce | FS Bancorp vs. Bank of Botetourt | FS Bancorp vs. AmeriServ 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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