Correlation Between CCSB Financial and Western Asset

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

Diversification Opportunities for CCSB Financial and Western Asset

0.36

Correlation Coefficient

CCSB Financial  Western Asset

Weak diversification

The 3 months correlation between CCSB and Western is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CCSB Financial Corp and Western Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Investment 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Investment has no effect on the direction of CCSB Financial i.e., CCSB Financial and Western Asset go up and down completely randomly.

Pair Corralation between CCSB Financial and Western Asset

Given the investment horizon of 90 days CCSB Financial Corp is expected to generate 5.37 times more return on investment than Western Asset. However, CCSB Financial is 5.37 times more volatile than Western Asset Investment. It trades about 0.16 of its potential returns per unit of risk. Western Asset Investment is currently generating about 0.21 per unit of risk. If you would invest  1,015  in CCSB Financial Corp on December 2, 2024 and sell it today you would earn a total of  65.00  from holding CCSB Financial Corp or generate 6.4% return on investment over 90 days.

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

CCSB Financial Corp  vs.  Western Asset Investment

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.

Western Asset Investment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Western Asset is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with CCSB Financial and Western Asset

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

The idea behind CCSB Financial Corp and Western Asset Investment 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.