Correlation Between Cullman Bancorp and Oak Ridge
Can any of the company-specific risk be diversified away by investing in both Cullman Bancorp and Oak Ridge 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 Cullman Bancorp and Oak Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullman Bancorp and Oak Ridge Financial, you can compare the effects of market volatilities on Cullman Bancorp and Oak Ridge 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 Cullman Bancorp with a short position of Oak Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullman Bancorp and Oak Ridge.
Diversification Opportunities for Cullman Bancorp and Oak Ridge
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cullman and Oak is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cullman Bancorp and Oak Ridge Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Ridge Financial and Cullman Bancorp 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 Cullman Bancorp are associated (or correlated) with Oak Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Ridge Financial has no effect on the direction of Cullman Bancorp i.e., Cullman Bancorp and Oak Ridge go up and down completely randomly.
Pair Corralation between Cullman Bancorp and Oak Ridge
Given the investment horizon of 90 days Cullman Bancorp is expected to under-perform the Oak Ridge. But the stock apears to be less risky and, when comparing its historical volatility, Cullman Bancorp is 1.97 times less risky than Oak Ridge. The stock trades about -0.02 of its potential returns per unit of risk. The Oak Ridge Financial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,786 in Oak Ridge Financial on September 3, 2024 and sell it today you would earn a total of 289.00 from holding Oak Ridge Financial or generate 16.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.31% |
| Values | Daily Returns |
Cullman Bancorp vs. Oak Ridge Financial
Performance |
| Timeline |
| Cullman Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Oak Ridge Financial |
Cullman Bancorp and Oak Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullman Bancorp and Oak Ridge
The main advantage of trading using opposite Cullman Bancorp and Oak Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullman Bancorp position performs unexpectedly, Oak Ridge 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 Oak Ridge will offset losses from the drop in Oak Ridge's long position.| Cullman Bancorp vs. Home Federal Bancorp | Cullman Bancorp vs. Lake Shore Bancorp | Cullman Bancorp vs. Community West Bancshares | Cullman Bancorp vs. Magyar Bancorp |
| Oak Ridge vs. Citizens Bancorp Investment | Oak Ridge vs. First Keystone Corp | Oak Ridge vs. Greenville Federal Financial | Oak Ridge vs. Main Street 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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