Correlation Between Main Street and Cincinnati Bancorp
Can any of the company-specific risk be diversified away by investing in both Main Street and Cincinnati 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 Main Street and Cincinnati Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Street Financial and Cincinnati Bancorp, you can compare the effects of market volatilities on Main Street and Cincinnati 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 Main Street with a short position of Cincinnati Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Street and Cincinnati Bancorp.
Diversification Opportunities for Main Street and Cincinnati Bancorp
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Main and Cincinnati is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Main Street Financial and Cincinnati Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Bancorp and Main Street 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 Main Street Financial are associated (or correlated) with Cincinnati Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cincinnati Bancorp has no effect on the direction of Main Street i.e., Main Street and Cincinnati Bancorp go up and down completely randomly.
Pair Corralation between Main Street and Cincinnati Bancorp
If you would invest 1,661 in Cincinnati Bancorp on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Cincinnati Bancorp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.25% |
| Values | Daily Returns |
Main Street Financial vs. Cincinnati Bancorp
Performance |
| Timeline |
| Main Street Financial |
| Cincinnati Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Main Street and Cincinnati Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Street and Cincinnati Bancorp
The main advantage of trading using opposite Main Street and Cincinnati Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Street position performs unexpectedly, Cincinnati 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 Cincinnati Bancorp will offset losses from the drop in Cincinnati Bancorp's long position.The idea behind Main Street Financial and Cincinnati Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cincinnati Bancorp vs. Middlefield Banc | Cincinnati Bancorp vs. CB Financial Services | Cincinnati Bancorp vs. Orange County Bancorp | Cincinnati Bancorp vs. Ames National |
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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