Correlation Between Penns Woods and CCFNB Bancorp
Can any of the company-specific risk be diversified away by investing in both Penns Woods and CCFNB 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 Penns Woods and CCFNB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penns Woods Bancorp and CCFNB Bancorp, you can compare the effects of market volatilities on Penns Woods and CCFNB 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 Penns Woods with a short position of CCFNB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penns Woods and CCFNB Bancorp.
Diversification Opportunities for Penns Woods and CCFNB Bancorp
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Penns and CCFNB is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Penns Woods Bancorp and CCFNB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCFNB Bancorp and Penns Woods 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 Penns Woods Bancorp are associated (or correlated) with CCFNB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCFNB Bancorp has no effect on the direction of Penns Woods i.e., Penns Woods and CCFNB Bancorp go up and down completely randomly.
Pair Corralation between Penns Woods and CCFNB Bancorp
Given the investment horizon of 90 days Penns Woods Bancorp is expected to generate 0.83 times more return on investment than CCFNB Bancorp. However, Penns Woods Bancorp is 1.21 times less risky than CCFNB Bancorp. It trades about 0.09 of its potential returns per unit of risk. CCFNB Bancorp is currently generating about 0.06 per unit of risk. If you would invest 1,906 in Penns Woods Bancorp on November 5, 2024 and sell it today you would earn a total of 1,137 from holding Penns Woods Bancorp or generate 59.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.81% |
| Values | Daily Returns |
Penns Woods Bancorp vs. CCFNB Bancorp
Performance |
| Timeline |
| Penns Woods Bancorp |
| CCFNB Bancorp |
Penns Woods and CCFNB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penns Woods and CCFNB Bancorp
The main advantage of trading using opposite Penns Woods and CCFNB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penns Woods position performs unexpectedly, CCFNB 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 CCFNB Bancorp will offset losses from the drop in CCFNB Bancorp's long position.| Penns Woods vs. 1st Source | Penns Woods vs. Great Southern Bancorp | Penns Woods vs. Waterstone Financial | Penns Woods vs. First Community |
| CCFNB Bancorp vs. Susquehanna Community Financial | CCFNB Bancorp vs. Mifflinburg Bancorp | CCFNB Bancorp vs. Woodlands Financial Services | CCFNB Bancorp vs. Penns Woods 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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