Correlation Between CNB and AMB Financial

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

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

Diversification Opportunities for CNB and AMB Financial

-0.79

Correlation Coefficient

CNB  AMB Financial

Pay attention - limited upside

The 3 months correlation between CNB and AMB is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding CNB Corp. and AMB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMB Financial Corp and CNB 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 CNB Corporation are associated (or correlated) with AMB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMB Financial Corp has no effect on the direction of CNB i.e., CNB and AMB Financial go up and down completely randomly.

Pair Corralation between CNB and AMB Financial

Given the investment horizon of 90 days CNB Corporation is expected to under-perform the AMB Financial. In addition to that, CNB is 1.91 times more volatile than AMB Financial Corp. It trades about -0.06 of its total potential returns per unit of risk. AMB Financial Corp is currently generating about 0.32 per unit of volatility. If you would invest  2,594  in AMB Financial Corp on September 14, 2025 and sell it today you would earn a total of  396.00  from holding AMB Financial Corp or generate 15.27% return on investment over 90 days.

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

CNB Corp.  vs.  AMB Financial Corp

CNB Corporation

Risk-Adjusted Performance

Weakest

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

AMB Financial Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AMB Financial Corp are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, AMB Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CNB and AMB Financial

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

The idea behind CNB Corporation and AMB Financial Corp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.