Correlation Between CCSB Financial and Ballston Spa

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Can any of the company-specific risk be diversified away by investing in both CCSB Financial and Ballston Spa 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 Ballston Spa 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 Ballston Spa Bancorp, you can compare the effects of market volatilities on CCSB Financial and Ballston Spa 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 Ballston Spa. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCSB Financial and Ballston Spa.

Diversification Opportunities for CCSB Financial and Ballston Spa

-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between CCSB and Ballston is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CCSB Financial Corp and Ballston Spa Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballston Spa Bancorp 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 Ballston Spa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballston Spa Bancorp has no effect on the direction of CCSB Financial i.e., CCSB Financial and Ballston Spa go up and down completely randomly.

Pair Corralation between CCSB Financial and Ballston Spa

Given the investment horizon of 90 days CCSB Financial Corp is expected to under-perform the Ballston Spa. In addition to that, CCSB Financial is 4.25 times more volatile than Ballston Spa Bancorp. It trades about -0.01 of its total potential returns per unit of risk. Ballston Spa Bancorp is currently generating about 0.15 per unit of volatility. If you would invest  4,946  in Ballston Spa Bancorp on September 23, 2024 and sell it today you would earn a total of  780.00  from holding Ballston Spa Bancorp or generate 15.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy56.3%
ValuesDaily Returns

CCSB Financial Corp  vs.  Ballston Spa Bancorp

 Performance 
       Timeline  
CCSB Financial Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Ballston Spa Bancorp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Good
Over the last 90 days Ballston Spa Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ballston Spa is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

CCSB Financial and Ballston Spa Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CCSB Financial and Ballston Spa

The main advantage of trading using opposite CCSB Financial and Ballston Spa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCSB Financial position performs unexpectedly, Ballston Spa 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 Ballston Spa will offset losses from the drop in Ballston Spa's long position.
The idea behind CCSB Financial Corp and Ballston Spa 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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