Correlation Between FNCB Bancorp and CF Bankshares
Can any of the company-specific risk be diversified away by investing in both FNCB Bancorp and CF Bankshares 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 FNCB Bancorp and CF Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FNCB Bancorp and CF Bankshares, you can compare the effects of market volatilities on FNCB Bancorp and CF Bankshares 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 FNCB Bancorp with a short position of CF Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNCB Bancorp and CF Bankshares.
Diversification Opportunities for FNCB Bancorp and CF Bankshares
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FNCB and CFBK is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FNCB Bancorp and CF Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Bankshares and FNCB 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 FNCB Bancorp are associated (or correlated) with CF Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Bankshares has no effect on the direction of FNCB Bancorp i.e., FNCB Bancorp and CF Bankshares go up and down completely randomly.
Pair Corralation between FNCB Bancorp and CF Bankshares
If you would invest 2,543 in CF Bankshares on August 28, 2024 and sell it today you would earn a total of 257.00 from holding CF Bankshares or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
FNCB Bancorp vs. CF Bankshares
Performance |
| Timeline |
| FNCB Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CF Bankshares |
FNCB Bancorp and CF Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNCB Bancorp and CF Bankshares
The main advantage of trading using opposite FNCB Bancorp and CF Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNCB Bancorp position performs unexpectedly, CF Bankshares 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 CF Bankshares will offset losses from the drop in CF Bankshares' long position.| FNCB Bancorp vs. Home Federal Bancorp | FNCB Bancorp vs. LINKBANCORP | FNCB Bancorp vs. Rhinebeck Bancorp | FNCB Bancorp vs. Lake Shore Bancorp |
| CF Bankshares vs. Magyar Bancorp | CF Bankshares vs. Home Federal Bancorp | CF Bankshares vs. Community West Bancshares | CF Bankshares vs. First Financial Northwest |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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