Correlation Between Cullman Bancorp and Financial Institutions
Can any of the company-specific risk be diversified away by investing in both Cullman Bancorp and Financial Institutions 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 Financial Institutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullman Bancorp and Financial Institutions, you can compare the effects of market volatilities on Cullman Bancorp and Financial Institutions 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 Financial Institutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullman Bancorp and Financial Institutions.
Diversification Opportunities for Cullman Bancorp and Financial Institutions
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cullman and Financial is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Cullman Bancorp and Financial Institutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Institutions 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 Financial Institutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Institutions has no effect on the direction of Cullman Bancorp i.e., Cullman Bancorp and Financial Institutions go up and down completely randomly.
Pair Corralation between Cullman Bancorp and Financial Institutions
If you would invest 2,561 in Financial Institutions on August 24, 2024 and sell it today you would earn a total of 185.00 from holding Financial Institutions or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Cullman Bancorp vs. Financial Institutions
Performance |
| Timeline |
| Cullman Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Financial Institutions |
Cullman Bancorp and Financial Institutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullman Bancorp and Financial Institutions
The main advantage of trading using opposite Cullman Bancorp and Financial Institutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullman Bancorp position performs unexpectedly, Financial Institutions 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 Financial Institutions will offset losses from the drop in Financial Institutions' 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 |
| Financial Institutions vs. First Community | Financial Institutions vs. Community West Bancshares | Financial Institutions vs. First Financial Northwest | Financial Institutions vs. First Northwest 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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