Correlation Between Merchants Marine and CBB Bancorp
Can any of the company-specific risk be diversified away by investing in both Merchants Marine and CBB 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 Merchants Marine and CBB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merchants Marine Bancorp and CBB Bancorp, you can compare the effects of market volatilities on Merchants Marine and CBB 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 Merchants Marine with a short position of CBB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchants Marine and CBB Bancorp.
Diversification Opportunities for Merchants Marine and CBB Bancorp
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merchants and CBB is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Merchants Marine Bancorp and CBB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBB Bancorp and Merchants Marine 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 Merchants Marine Bancorp are associated (or correlated) with CBB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBB Bancorp has no effect on the direction of Merchants Marine i.e., Merchants Marine and CBB Bancorp go up and down completely randomly.
Pair Corralation between Merchants Marine and CBB Bancorp
Given the investment horizon of 90 days Merchants Marine is expected to generate 1.92 times less return on investment than CBB Bancorp. In addition to that, Merchants Marine is 1.76 times more volatile than CBB Bancorp. It trades about 0.03 of its total potential returns per unit of risk. CBB Bancorp is currently generating about 0.09 per unit of volatility. If you would invest 1,132 in CBB Bancorp on September 3, 2024 and sell it today you would earn a total of 60.00 from holding CBB Bancorp or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 11.59% |
| Values | Daily Returns |
Merchants Marine Bancorp vs. CBB Bancorp
Performance |
| Timeline |
| Merchants Marine Bancorp |
| CBB Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merchants Marine and CBB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merchants Marine and CBB Bancorp
The main advantage of trading using opposite Merchants Marine and CBB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchants Marine position performs unexpectedly, CBB 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 CBB Bancorp will offset losses from the drop in CBB Bancorp's long position.| Merchants Marine vs. Mission Valley Bancorp | Merchants Marine vs. Harbor Bankshares | Merchants Marine vs. Oconee Financial | Merchants Marine vs. MF Bancorp |
| CBB Bancorp vs. CIB Marine Bancshares | CBB Bancorp vs. United Bancorporation of | CBB Bancorp vs. U I Financial | CBB Bancorp vs. Heartland Banccorp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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