Correlation Between CFSB Bancorp and NSTS Bancorp

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

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

Diversification Opportunities for CFSB Bancorp and NSTS Bancorp

0.39

Correlation Coefficient

CFSB Bancorp  NSTS Bancorp

Weak diversification

The 3 months correlation between CFSB and NSTS is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CFSB Bancorp and NSTS Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTS Bancorp and CFSB Bancorp 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 CFSB Bancorp are associated (or correlated) with NSTS Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTS Bancorp has no effect on the direction of CFSB Bancorp i.e., CFSB Bancorp and NSTS Bancorp go up and down completely randomly.

Pair Corralation between CFSB Bancorp and NSTS Bancorp

Given the investment horizon of 90 days CFSB Bancorp is expected to generate 0.25 times more return on investment than NSTS Bancorp. However, CFSB Bancorp is 3.93 times less risky than NSTS Bancorp. It trades about 0.21 of its potential returns per unit of risk. NSTS Bancorp is currently generating about -0.07 per unit of risk. If you would invest  1,357  in CFSB Bancorp on May 24, 2025 and sell it today you would earn a total of  34.00  from holding CFSB Bancorp or generate 2.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CFSB Bancorp  vs.  NSTS Bancorp

CFSB Bancorp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CFSB Bancorp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CFSB Bancorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

NSTS Bancorp

Risk-Adjusted Performance

Weakest

Over the last 90 days NSTS Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, NSTS Bancorp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CFSB Bancorp and NSTS Bancorp

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

The idea behind CFSB Bancorp and NSTS Bancorp 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.