Correlation Between CNB and Oxford Bank
Can any of the company-specific risk be diversified away by investing in both CNB and Oxford Bank 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 Oxford Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNB Corporation and Oxford Bank, you can compare the effects of market volatilities on CNB and Oxford Bank 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 Oxford Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNB and Oxford Bank.
Diversification Opportunities for CNB and Oxford Bank
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CNB and Oxford is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding CNB Corp. and Oxford Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Bank 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 Oxford Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Bank has no effect on the direction of CNB i.e., CNB and Oxford Bank go up and down completely randomly.
Pair Corralation between CNB and Oxford Bank
Given the investment horizon of 90 days CNB Corporation is expected to under-perform the Oxford Bank. But the pink sheet apears to be less risky and, when comparing its historical volatility, CNB Corporation is 1.4 times less risky than Oxford Bank. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Oxford Bank is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,250 in Oxford Bank on August 25, 2024 and sell it today you would earn a total of 90.00 from holding Oxford Bank or generate 2.77% 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. Oxford Bank
Performance |
| Timeline |
| CNB Corporation |
| Oxford Bank |
CNB and Oxford Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNB and Oxford Bank
The main advantage of trading using opposite CNB and Oxford Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNB position performs unexpectedly, Oxford Bank 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 Oxford Bank will offset losses from the drop in Oxford Bank's long position.| CNB vs. Standard Bank Group | CNB vs. PSB Holdings | CNB vs. United Overseas Bank | CNB vs. Turkiye Garanti Bankasi |
| Oxford Bank vs. Standard Bank Group | Oxford Bank vs. PSB Holdings | Oxford Bank vs. United Overseas Bank | Oxford Bank vs. Turkiye Garanti Bankasi |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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