Correlation Between OptimumBank Holdings and Kentucky First
Can any of the company-specific risk be diversified away by investing in both OptimumBank Holdings and Kentucky First 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 OptimumBank Holdings and Kentucky First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OptimumBank Holdings and Kentucky First Federal, you can compare the effects of market volatilities on OptimumBank Holdings and Kentucky First 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 OptimumBank Holdings with a short position of Kentucky First. Check out your portfolio center. Please also check ongoing floating volatility patterns of OptimumBank Holdings and Kentucky First.
Diversification Opportunities for OptimumBank Holdings and Kentucky First
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between OptimumBank and Kentucky is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding OptimumBank Holdings and Kentucky First Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentucky First Federal and OptimumBank Holdings 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 OptimumBank Holdings are associated (or correlated) with Kentucky First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentucky First Federal has no effect on the direction of OptimumBank Holdings i.e., OptimumBank Holdings and Kentucky First go up and down completely randomly.
Pair Corralation between OptimumBank Holdings and Kentucky First
Given the investment horizon of 90 days OptimumBank Holdings is expected to under-perform the Kentucky First. But the stock apears to be less risky and, when comparing its historical volatility, OptimumBank Holdings is 2.12 times less risky than Kentucky First. The stock trades about -0.07 of its potential returns per unit of risk. The Kentucky First Federal is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 258.00 in Kentucky First Federal on September 14, 2024 and sell it today you would earn a total of 22.00 from holding Kentucky First Federal or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OptimumBank Holdings vs. Kentucky First Federal
Performance |
| Timeline |
| OptimumBank Holdings |
| Kentucky First Federal |
OptimumBank Holdings and Kentucky First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OptimumBank Holdings and Kentucky First
The main advantage of trading using opposite OptimumBank Holdings and Kentucky First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OptimumBank Holdings position performs unexpectedly, Kentucky First 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 Kentucky First will offset losses from the drop in Kentucky First's long position.| OptimumBank Holdings vs. First National Bank | OptimumBank Holdings vs. TrustCo Bank Corp | OptimumBank Holdings vs. Inter Co Class | OptimumBank Holdings vs. Rhinebeck Bancorp |
| Kentucky First vs. Home Federal Bancorp | Kentucky First vs. Lake Shore Bancorp | Kentucky First vs. Commerzbank AG | Kentucky First vs. Investar Holding Corp |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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