Correlation Between F M and CCFNB Bancorp

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

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

Diversification Opportunities for F M and CCFNB Bancorp

0.76

Correlation Coefficient

F M  CCFNB Bancorp

Poor diversification

The 3 months correlation between FMBM and CCFNB is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding F M Bank and CCFNB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCFNB Bancorp and F M 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 F M Bank 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 F M i.e., F M and CCFNB Bancorp go up and down completely randomly.

Pair Corralation between F M and CCFNB Bancorp

Given the investment horizon of 90 days F M Bank is expected to generate 0.64 times more return on investment than CCFNB Bancorp. However, F M Bank is 1.57 times less risky than CCFNB Bancorp. It trades about 0.28 of its potential returns per unit of risk. CCFNB Bancorp is currently generating about 0.08 per unit of risk. If you would invest  1,933  in F M Bank on May 17, 2025 and sell it today you would earn a total of  390.00  from holding F M Bank or generate 20.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

F M Bank  vs.  CCFNB Bancorp

F M Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in F M Bank are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental drivers, F M displayed solid returns over the last few months and may actually be approaching a breakup point.

CCFNB Bancorp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in CCFNB Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical and fundamental indicators, CCFNB Bancorp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with F M and CCFNB Bancorp

The main advantage of trading using opposite F M and CCFNB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if F M 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.

The idea behind F M Bank and CCFNB 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.