Correlation Between Apollo Bancorp and CNB

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

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

Diversification Opportunities for Apollo Bancorp and CNB

0.64

Correlation Coefficient

Apollo Bancorp  CNB

Poor diversification

The 3 months correlation between Apollo and CNB is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Bancorp and CNB Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNB Corporation and Apollo 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 Apollo Bancorp are associated (or correlated) with CNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNB Corporation has no effect on the direction of Apollo Bancorp i.e., Apollo Bancorp and CNB go up and down completely randomly.

Pair Corralation between Apollo Bancorp and CNB

Given the investment horizon of 90 days Apollo Bancorp is expected to under-perform the CNB. In addition to that, Apollo Bancorp is 1.4 times more volatile than CNB Corporation. It trades about -0.18 of its total potential returns per unit of risk. CNB Corporation is currently generating about -0.09 per unit of volatility. If you would invest  1,850  in CNB Corporation on October 6, 2024 and sell it today you would lose (50.00) from holding CNB Corporation or give up 2.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Apollo Bancorp  vs.  CNB Corp.

Apollo Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

CNB Corporation

Risk-Adjusted Performance

0 of 100

Very Weak

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apollo Bancorp and CNB

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

The idea behind Apollo Bancorp and CNB Corporation 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.