Correlation Between First Keystone and CCFNB Bancorp
Can any of the company-specific risk be diversified away by investing in both First Keystone and CCFNB Bancorp 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 Keystone and CCFNB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Keystone Corp and CCFNB Bancorp, you can compare the effects of market volatilities on First Keystone and CCFNB Bancorp 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 Keystone with a short position of CCFNB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Keystone and CCFNB Bancorp.
Diversification Opportunities for First Keystone and CCFNB Bancorp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and CCFNB is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding First Keystone Corp and CCFNB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCFNB Bancorp and First Keystone 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 Keystone Corp are associated (or correlated) with CCFNB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCFNB Bancorp has no effect on the direction of First Keystone i.e., First Keystone and CCFNB Bancorp go up and down completely randomly.
Pair Corralation between First Keystone and CCFNB Bancorp
Given the investment horizon of 90 days First Keystone is expected to generate 1.01 times less return on investment than CCFNB Bancorp. In addition to that, First Keystone is 1.01 times more volatile than CCFNB Bancorp. It trades about 0.01 of its total potential returns per unit of risk. CCFNB Bancorp is currently generating about 0.01 per unit of volatility. If you would invest 5,200 in CCFNB Bancorp on August 29, 2024 and sell it today you would lose (1,553) from holding CCFNB Bancorp or give up 29.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.72% |
| Values | Daily Returns |
First Keystone Corp vs. CCFNB Bancorp
Performance |
| Timeline |
| First Keystone Corp |
| CCFNB Bancorp |
First Keystone and CCFNB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Keystone and CCFNB Bancorp
The main advantage of trading using opposite First Keystone and CCFNB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Keystone position performs unexpectedly, CCFNB Bancorp 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 CCFNB Bancorp will offset losses from the drop in CCFNB Bancorp's long position.| First Keystone vs. Citizens Bancorp Investment | First Keystone vs. Greenville Federal Financial | First Keystone vs. Oak Ridge Financial | First Keystone vs. Main Street Financial |
| CCFNB Bancorp vs. Susquehanna Community Financial | CCFNB Bancorp vs. Mifflinburg Bancorp | CCFNB Bancorp vs. Woodlands Financial Services | CCFNB Bancorp vs. Penns Woods 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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