Correlation Between KS Bancorp and Carter Bank
Can any of the company-specific risk be diversified away by investing in both KS Bancorp and Carter Bank 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 KS Bancorp and Carter Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KS Bancorp and Carter Bank and, you can compare the effects of market volatilities on KS Bancorp and Carter Bank 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 KS Bancorp with a short position of Carter Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of KS Bancorp and Carter Bank.
Diversification Opportunities for KS Bancorp and Carter Bank
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KSBI and Carter is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding KS Bancorp and Carter Bank and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carter Bank and KS 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 KS Bancorp are associated (or correlated) with Carter Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carter Bank has no effect on the direction of KS Bancorp i.e., KS Bancorp and Carter Bank go up and down completely randomly.
Pair Corralation between KS Bancorp and Carter Bank
Given the investment horizon of 90 days KS Bancorp is expected to generate 1.17 times less return on investment than Carter Bank. In addition to that, KS Bancorp is 1.05 times more volatile than Carter Bank and. It trades about 0.01 of its total potential returns per unit of risk. Carter Bank and is currently generating about 0.01 per unit of volatility. If you would invest 1,799 in Carter Bank and on August 30, 2024 and sell it today you would earn a total of 72.00 from holding Carter Bank and or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 67.14% |
| Values | Daily Returns |
KS Bancorp vs. Carter Bank and
Performance |
| Timeline |
| KS Bancorp |
| Carter Bank |
KS Bancorp and Carter Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KS Bancorp and Carter Bank
The main advantage of trading using opposite KS Bancorp and Carter Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KS Bancorp position performs unexpectedly, Carter Bank 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 Carter Bank will offset losses from the drop in Carter Bank's long position.| KS Bancorp vs. Invesco High Income | KS Bancorp vs. Blackrock Muniholdings Ny | KS Bancorp vs. Nuveen California Select | KS Bancorp vs. MFS Investment Grade |
| Carter Bank vs. Home Bancorp | Carter Bank vs. Community West Bancshares | Carter Bank vs. First Community | Carter Bank vs. Great Southern 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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