Correlation Between Oconee Federal and FS Bancorp
Can any of the company-specific risk be diversified away by investing in both Oconee Federal and FS 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 Oconee Federal and FS Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oconee Federal Financial and FS Bancorp, you can compare the effects of market volatilities on Oconee Federal and FS 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 Oconee Federal with a short position of FS Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oconee Federal and FS Bancorp.
Diversification Opportunities for Oconee Federal and FS Bancorp
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oconee and FSBW is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Oconee Federal Financial and FS Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS Bancorp and Oconee Federal 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 Oconee Federal Financial are associated (or correlated) with FS Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS Bancorp has no effect on the direction of Oconee Federal i.e., Oconee Federal and FS Bancorp go up and down completely randomly.
Pair Corralation between Oconee Federal and FS Bancorp
Given the investment horizon of 90 days Oconee Federal Financial is expected to under-perform the FS Bancorp. In addition to that, Oconee Federal is 1.34 times more volatile than FS Bancorp. It trades about -0.08 of its total potential returns per unit of risk. FS Bancorp is currently generating about 0.05 per unit of volatility. If you would invest 3,198 in FS Bancorp on August 24, 2024 and sell it today you would earn a total of 1,492 from holding FS Bancorp or generate 46.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.06% |
| Values | Daily Returns |
Oconee Federal Financial vs. FS Bancorp
Performance |
| Timeline |
| Oconee Federal Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FS Bancorp |
Oconee Federal and FS Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oconee Federal and FS Bancorp
The main advantage of trading using opposite Oconee Federal and FS Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oconee Federal position performs unexpectedly, FS 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 FS Bancorp will offset losses from the drop in FS Bancorp's long position.| Oconee Federal vs. Home Federal Bancorp | Oconee Federal vs. Community West Bancshares | Oconee Federal vs. Magyar Bancorp |
| FS Bancorp vs. First Community | FS Bancorp vs. Oak Valley Bancorp | FS Bancorp vs. First Financial Northwest | FS Bancorp vs. ESSA 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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