Correlation Between Coastal Financial and Oconee Federal

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

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

Diversification Opportunities for Coastal Financial and Oconee Federal

-0.88

Correlation Coefficient

Coastal Financial  Oconee Federal

Pay attention - limited upside

The 3 months correlation between Coastal and Oconee is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Financial Corp and Oconee Federal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oconee Federal Financial and Coastal Financial 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 Coastal Financial Corp are associated (or correlated) with Oconee Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oconee Federal Financial has no effect on the direction of Coastal Financial i.e., Coastal Financial and Oconee Federal go up and down completely randomly.

Pair Corralation between Coastal Financial and Oconee Federal

If you would invest  4,919  in Coastal Financial Corp on September 12, 2024 and sell it today you would earn a total of  2,661  from holding Coastal Financial Corp or generate 54.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Coastal Financial Corp  vs.  Oconee Federal Financial

Coastal Financial Corp

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coastal Financial Corp are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Coastal Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Oconee Federal Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oconee Federal Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Oconee Federal is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Coastal Financial and Oconee Federal

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

The idea behind Coastal Financial Corp and Oconee Federal Financial 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.