Correlation Between Community Capital and Benchmark Bankshares

Can any of the company-specific risk be diversified away by investing in both Community Capital and Benchmark Bankshares 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 Community Capital and Benchmark Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Community Capital Bancshares and Benchmark Bankshares, you can compare the effects of market volatilities on Community Capital and Benchmark Bankshares 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 Community Capital with a short position of Benchmark Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community Capital and Benchmark Bankshares.

Diversification Opportunities for Community Capital and Benchmark Bankshares

0.0

Correlation Coefficient

Community Capital  Benchmark Bankshares

Pay attention - limited upside

The 3 months correlation between Community and Benchmark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Community Capital Bancshares and Benchmark Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Bankshares and Community Capital 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 Community Capital Bancshares are associated (or correlated) with Benchmark Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Bankshares has no effect on the direction of Community Capital i.e., Community Capital and Benchmark Bankshares go up and down completely randomly.

Pair Corralation between Community Capital and Benchmark Bankshares

If you would invest  2,557  in Benchmark Bankshares on May 2, 2025 and sell it today you would earn a total of  343.00  from holding Benchmark Bankshares or generate 13.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Community Capital Bancshares  vs.  Benchmark Bankshares

Community Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Community Capital Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Community Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Benchmark Bankshares

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Benchmark Bankshares are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental drivers, Benchmark Bankshares displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Community Capital and Benchmark Bankshares

The main advantage of trading using opposite Community Capital and Benchmark Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community Capital position performs unexpectedly, Benchmark Bankshares 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 Benchmark Bankshares will offset losses from the drop in Benchmark Bankshares' long position.

The idea behind Community Capital Bancshares and Benchmark Bankshares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.