Correlation Between 1st Colonial and CCSB Financial
Can any of the company-specific risk be diversified away by investing in both 1st Colonial 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 1st Colonial and CCSB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1st Colonial Bancorp and CCSB Financial Corp, you can compare the effects of market volatilities on 1st Colonial 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 1st Colonial with a short position of CCSB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1st Colonial and CCSB Financial.
Diversification Opportunities for 1st Colonial and CCSB Financial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 1st and CCSB is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding 1st Colonial Bancorp 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 1st Colonial 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 1st Colonial Bancorp 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 1st Colonial i.e., 1st Colonial and CCSB Financial go up and down completely randomly.
Pair Corralation between 1st Colonial and CCSB Financial
Given the investment horizon of 90 days 1st Colonial is expected to generate 9.57 times less return on investment than CCSB Financial. But when comparing it to its historical volatility, 1st Colonial Bancorp is 4.64 times less risky than CCSB Financial. It trades about 0.08 of its potential returns per unit of risk. CCSB Financial Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,015 in CCSB Financial Corp on November 27, 2024 and sell it today you would earn a total of 65.00 from holding CCSB Financial Corp or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
1st Colonial Bancorp vs. CCSB Financial Corp
Performance |
| Timeline |
| 1st Colonial Bancorp |
| CCSB Financial Corp |
1st Colonial and CCSB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1st Colonial and CCSB Financial
The main advantage of trading using opposite 1st Colonial and CCSB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1st Colonial 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.| 1st Colonial vs. CCSB Financial Corp | 1st Colonial vs. Bank of Utica | 1st Colonial vs. First Community Financial | 1st Colonial vs. BEO Bancorp |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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