Correlation Between Cullman Bancorp and Main Street
Can any of the company-specific risk be diversified away by investing in both Cullman Bancorp and Main Street 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 Main Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullman Bancorp and Main Street Financial, you can compare the effects of market volatilities on Cullman Bancorp and Main Street 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 Main Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullman Bancorp and Main Street.
Diversification Opportunities for Cullman Bancorp and Main Street
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cullman and Main is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cullman Bancorp and Main Street Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Main Street 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 Main Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Main Street Financial has no effect on the direction of Cullman Bancorp i.e., Cullman Bancorp and Main Street go up and down completely randomly.
Pair Corralation between Cullman Bancorp and Main Street
Given the investment horizon of 90 days Cullman Bancorp is expected to under-perform the Main Street. But the stock apears to be less risky and, when comparing its historical volatility, Cullman Bancorp is 2.09 times less risky than Main Street. The stock trades about -0.02 of its potential returns per unit of risk. The Main Street Financial is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,658 in Main Street Financial on September 3, 2024 and sell it today you would lose (218.00) from holding Main Street Financial or give up 13.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.99% |
| Values | Daily Returns |
Cullman Bancorp vs. Main Street Financial
Performance |
| Timeline |
| Cullman Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Main Street Financial |
Cullman Bancorp and Main Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullman Bancorp and Main Street
The main advantage of trading using opposite Cullman Bancorp and Main Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullman Bancorp position performs unexpectedly, Main Street 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 Main Street will offset losses from the drop in Main Street'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 |
| Main Street vs. CCFNB Bancorp | Main Street vs. Burke Herbert Financial | Main Street vs. First IC | Main Street vs. Enterprise Financial Services |
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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