Correlation Between CCSB Financial and Avidbank Holdings

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

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

Diversification Opportunities for CCSB Financial and Avidbank Holdings

-0.15

Correlation Coefficient

CCSB Financial  Avidbank Holdings

Good diversification

The 3 months correlation between CCSB and Avidbank is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CCSB Financial Corp and Avidbank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avidbank Holdings and CCSB 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 CCSB Financial Corp are associated (or correlated) with Avidbank Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avidbank Holdings has no effect on the direction of CCSB Financial i.e., CCSB Financial and Avidbank Holdings go up and down completely randomly.

Pair Corralation between CCSB Financial and Avidbank Holdings

Given the investment horizon of 90 days CCSB Financial Corp is expected to under-perform the Avidbank Holdings. In addition to that, CCSB Financial is 1.06 times more volatile than Avidbank Holdings. It trades about -0.07 of its total potential returns per unit of risk. Avidbank Holdings is currently generating about 0.07 per unit of volatility. If you would invest  2,211  in Avidbank Holdings on December 2, 2024 and sell it today you would earn a total of  145.00  from holding Avidbank Holdings or generate 6.56% return on investment over 90 days.

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

CCSB Financial Corp  vs.  Avidbank Holdings

CCSB Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CCSB Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Avidbank Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Avidbank Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental drivers, Avidbank Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CCSB Financial and Avidbank Holdings

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

The idea behind CCSB Financial Corp and Avidbank Holdings 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.