Correlation Between Woodlands Financial and CCFNB Bancorp
Can any of the company-specific risk be diversified away by investing in both Woodlands Financial 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 Woodlands Financial and CCFNB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woodlands Financial Services and CCFNB Bancorp, you can compare the effects of market volatilities on Woodlands Financial 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 Woodlands Financial with a short position of CCFNB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woodlands Financial and CCFNB Bancorp.
Diversification Opportunities for Woodlands Financial and CCFNB Bancorp
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Woodlands and CCFNB is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Woodlands Financial Services and CCFNB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCFNB Bancorp and Woodlands Financial 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 Woodlands Financial Services 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 Woodlands Financial i.e., Woodlands Financial and CCFNB Bancorp go up and down completely randomly.
Pair Corralation between Woodlands Financial and CCFNB Bancorp
Given the investment horizon of 90 days Woodlands Financial is expected to generate 1.08 times less return on investment than CCFNB Bancorp. In addition to that, Woodlands Financial is 1.08 times more volatile than CCFNB Bancorp. It trades about 0.05 of its total potential returns per unit of risk. CCFNB Bancorp is currently generating about 0.06 per unit of volatility. If you would invest 3,340 in CCFNB Bancorp on November 5, 2024 and sell it today you would earn a total of 1,060 from holding CCFNB Bancorp or generate 31.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.6% |
| Values | Daily Returns |
Woodlands Financial Services vs. CCFNB Bancorp
Performance |
| Timeline |
| Woodlands Financial |
| CCFNB Bancorp |
Woodlands Financial and CCFNB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woodlands Financial and CCFNB Bancorp
The main advantage of trading using opposite Woodlands Financial and CCFNB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woodlands Financial 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.| Woodlands Financial vs. Eastern Michigan Financial | Woodlands Financial vs. Commercial National Financial | Woodlands Financial vs. Mifflinburg Bancorp | Woodlands Financial vs. Apollo Bancorp |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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