Correlation Between First Keystone and Kentucky First
Can any of the company-specific risk be diversified away by investing in both First Keystone and Kentucky First 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 Kentucky First 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 Kentucky First Federal, you can compare the effects of market volatilities on First Keystone and Kentucky First 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 Kentucky First. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Keystone and Kentucky First.
Diversification Opportunities for First Keystone and Kentucky First
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Kentucky is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding First Keystone Corp and Kentucky First Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentucky First Federal 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 Kentucky First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentucky First Federal has no effect on the direction of First Keystone i.e., First Keystone and Kentucky First go up and down completely randomly.
Pair Corralation between First Keystone and Kentucky First
Given the investment horizon of 90 days First Keystone Corp is expected to generate 1.04 times more return on investment than Kentucky First. However, First Keystone is 1.04 times more volatile than Kentucky First Federal. It trades about 0.01 of its potential returns per unit of risk. Kentucky First Federal is currently generating about -0.06 per unit of risk. If you would invest 1,567 in First Keystone Corp on August 29, 2024 and sell it today you would lose (48.00) from holding First Keystone Corp or give up 3.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.67% |
| Values | Daily Returns |
First Keystone Corp vs. Kentucky First Federal
Performance |
| Timeline |
| First Keystone Corp |
| Kentucky First Federal |
First Keystone and Kentucky First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Keystone and Kentucky First
The main advantage of trading using opposite First Keystone and Kentucky First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Keystone position performs unexpectedly, Kentucky First 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 Kentucky First will offset losses from the drop in Kentucky First'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 |
| Kentucky First vs. Home Federal Bancorp | Kentucky First vs. Lake Shore Bancorp | Kentucky First vs. Commerzbank AG | Kentucky First vs. Investar Holding Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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