Correlation Between Kentucky First and CCFNB Bancorp
Can any of the company-specific risk be diversified away by investing in both Kentucky First 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 Kentucky First and CCFNB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kentucky First Federal and CCFNB Bancorp, you can compare the effects of market volatilities on Kentucky First 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 Kentucky First with a short position of CCFNB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kentucky First and CCFNB Bancorp.
Diversification Opportunities for Kentucky First and CCFNB Bancorp
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kentucky and CCFNB is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kentucky First Federal and CCFNB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCFNB Bancorp and Kentucky First 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 Kentucky First Federal 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 Kentucky First i.e., Kentucky First and CCFNB Bancorp go up and down completely randomly.
Pair Corralation between Kentucky First and CCFNB Bancorp
Given the investment horizon of 90 days Kentucky First Federal is expected to under-perform the CCFNB Bancorp. In addition to that, Kentucky First is 1.26 times more volatile than CCFNB Bancorp. It trades about -0.06 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 3,719 in CCFNB Bancorp on August 29, 2024 and sell it today you would lose (72.00) from holding CCFNB Bancorp or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.88% |
| Values | Daily Returns |
Kentucky First Federal vs. CCFNB Bancorp
Performance |
| Timeline |
| Kentucky First Federal |
| CCFNB Bancorp |
Kentucky First and CCFNB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kentucky First and CCFNB Bancorp
The main advantage of trading using opposite Kentucky First and CCFNB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kentucky First 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.| Kentucky First vs. Home Federal Bancorp | Kentucky First vs. Lake Shore Bancorp | Kentucky First vs. Commerzbank AG | Kentucky First vs. Investar Holding Corp |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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