Correlation Between IShares Trust and CSB Bancorp

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

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

Diversification Opportunities for IShares Trust and CSB Bancorp

0.86

Correlation Coefficient

IShares Trust  CSB Bancorp

Very poor diversification

The 3 months correlation between IShares and CSB is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and CSB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSB Bancorp and IShares Trust 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 iShares Trust are associated (or correlated) with CSB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSB Bancorp has no effect on the direction of IShares Trust i.e., IShares Trust and CSB Bancorp go up and down completely randomly.

Pair Corralation between IShares Trust and CSB Bancorp

Given the investment horizon of 90 days IShares Trust is expected to generate 2.8 times less return on investment than CSB Bancorp. But when comparing it to its historical volatility, iShares Trust is 7.66 times less risky than CSB Bancorp. It trades about 0.45 of its potential returns per unit of risk. CSB Bancorp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  4,101  in CSB Bancorp on May 21, 2025 and sell it today you would earn a total of  399.00  from holding CSB Bancorp or generate 9.73% return on investment over 90 days.

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

iShares Trust   vs.  CSB Bancorp

iShares Trust

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, IShares Trust is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

CSB Bancorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CSB Bancorp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental drivers, CSB Bancorp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with IShares Trust and CSB Bancorp

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

The idea behind iShares Trust and CSB 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.