Correlation Between First National and CCSB Financial
Can any of the company-specific risk be diversified away by investing in both First National and CCSB Financial 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 First National and CCSB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First National Bank and CCSB Financial Corp, you can compare the effects of market volatilities on First National and CCSB Financial 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 First National with a short position of CCSB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and CCSB Financial.
Diversification Opportunities for First National and CCSB Financial
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and CCSB is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding First National Bank and CCSB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCSB Financial Corp and First National 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 First National Bank are associated (or correlated) with CCSB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCSB Financial Corp has no effect on the direction of First National i.e., First National and CCSB Financial go up and down completely randomly.
Pair Corralation between First National and CCSB Financial
Given the investment horizon of 90 days First National Bank is expected to generate 2.55 times more return on investment than CCSB Financial. However, First National is 2.55 times more volatile than CCSB Financial Corp. It trades about 0.07 of its potential returns per unit of risk. CCSB Financial Corp is currently generating about -0.04 per unit of risk. If you would invest 22,351 in First National Bank on September 13, 2024 and sell it today you would earn a total of 649.00 from holding First National Bank or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First National Bank vs. CCSB Financial Corp
Performance |
| Timeline |
| First National Bank |
| CCSB Financial Corp |
First National and CCSB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First National and CCSB Financial
The main advantage of trading using opposite First National and CCSB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First National position performs unexpectedly, CCSB Financial 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 CCSB Financial will offset losses from the drop in CCSB Financial's long position.| First National vs. IF Bancorp | First National vs. LINKBANCORP | First National vs. Pathfinder Bancorp | First National vs. First Keystone Corp |
| CCSB Financial vs. Weibo Corp | CCSB Financial vs. Procter Gamble | CCSB Financial vs. Integral Ad Science | CCSB Financial vs. Toro Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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