Correlation Between Orange County and CB Financial
Can any of the company-specific risk be diversified away by investing in both Orange County and CB Financial 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 Orange County and CB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orange County Bancorp and CB Financial Services, you can compare the effects of market volatilities on Orange County and CB Financial 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 Orange County with a short position of CB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orange County and CB Financial.
Diversification Opportunities for Orange County and CB Financial
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Orange and CBFV is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Orange County Bancorp and CB Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CB Financial Services and Orange County 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 Orange County Bancorp are associated (or correlated) with CB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CB Financial Services has no effect on the direction of Orange County i.e., Orange County and CB Financial go up and down completely randomly.
Pair Corralation between Orange County and CB Financial
Considering the 90-day investment horizon Orange County is expected to generate 7.32 times less return on investment than CB Financial. In addition to that, Orange County is 1.83 times more volatile than CB Financial Services. It trades about 0.01 of its total potential returns per unit of risk. CB Financial Services is currently generating about 0.13 per unit of volatility. If you would invest 2,701 in CB Financial Services on August 29, 2024 and sell it today you would earn a total of 389.00 from holding CB Financial Services or generate 14.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orange County Bancorp vs. CB Financial Services
Performance |
| Timeline |
| Orange County Bancorp |
| CB Financial Services |
Orange County and CB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orange County and CB Financial
The main advantage of trading using opposite Orange County and CB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orange County position performs unexpectedly, CB Financial 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 CB Financial will offset losses from the drop in CB Financial's long position.| Orange County vs. Southern States Bancshares | Orange County vs. US Century Bank | Orange County vs. Third Coast Bancshares | Orange County vs. Esquire Financial Holdings |
| CB Financial vs. Home Federal Bancorp | CB Financial vs. First Northwest Bancorp | CB Financial vs. First Financial Northwest | CB Financial vs. First Capital |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |