Correlation Between CCSB Financial and Nmb Financial

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

Diversification Opportunities for CCSB Financial and Nmb Financial

-0.59

Correlation Coefficient

CCSB Financial  Nmb Financial

Excellent diversification

The 3 months correlation between CCSB and Nmb is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding CCSB Financial Corp and Nmb Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nmb Financial Corp 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 Nmb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nmb Financial Corp has no effect on the direction of CCSB Financial i.e., CCSB Financial and Nmb Financial go up and down completely randomly.

Pair Corralation between CCSB Financial and Nmb Financial

Given the investment horizon of 90 days CCSB Financial Corp is expected to under-perform the Nmb Financial. In addition to that, CCSB Financial is 1.67 times more volatile than Nmb Financial Corp. It trades about 0.0 of its total potential returns per unit of risk. Nmb Financial Corp is currently generating about 0.12 per unit of volatility. If you would invest  974.00  in Nmb Financial Corp on October 1, 2024 and sell it today you would earn a total of  426.00  from holding Nmb Financial Corp or generate 43.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	69.2%
Values	Daily Returns

CCSB Financial Corp  vs.  Nmb Financial Corp

CCSB Financial Corp

Risk-Adjusted Performance

0 of 100

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 unfluctuating 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.

Nmb Financial Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nmb Financial Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental drivers, Nmb Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CCSB Financial and Nmb Financial

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

The idea behind CCSB Financial Corp and Nmb Financial Corp 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.

Check out your portfolio center.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.