Correlation Between CCSB Financial and National Capital
Can any of the company-specific risk be diversified away by investing in both CCSB Financial and National Capital 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 CCSB Financial and National Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCSB Financial Corp and National Capital Bank, you can compare the effects of market volatilities on CCSB Financial and National Capital 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 CCSB Financial with a short position of National Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCSB Financial and National Capital.
Diversification Opportunities for CCSB Financial and National Capital
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CCSB and National is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CCSB Financial Corp and National Capital Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Capital Bank and CCSB 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 CCSB Financial Corp are associated (or correlated) with National Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Capital Bank has no effect on the direction of CCSB Financial i.e., CCSB Financial and National Capital go up and down completely randomly.
Pair Corralation between CCSB Financial and National Capital
Given the investment horizon of 90 days CCSB Financial Corp is expected to under-perform the National Capital. In addition to that, CCSB Financial is 1.23 times more volatile than National Capital Bank. It trades about -0.24 of its total potential returns per unit of risk. National Capital Bank is currently generating about 0.08 per unit of volatility. If you would invest 17,511 in National Capital Bank on June 22, 2024 and sell it today you would earn a total of 989.00 from holding National Capital Bank or generate 5.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CCSB Financial Corp vs. National Capital Bank
Performance |
Timeline |
CCSB Financial Corp |
National Capital Bank |
CCSB Financial and National Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CCSB Financial and National Capital
The main advantage of trading using opposite CCSB Financial and National Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCSB Financial position performs unexpectedly, National Capital 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 National Capital will offset losses from the drop in National Capital's long position.CCSB Financial vs. Blackrock Muni Intermediate | CCSB Financial vs. Blackrock Muniyield Quality | CCSB Financial vs. Blackrock Muniyield Quality | CCSB Financial vs. Invesco High Income |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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