Correlation Between CCSB Financial and Washington Business
Can any of the company-specific risk be diversified away by investing in both CCSB Financial and Washington Business 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 Washington Business 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 Washington Business Bank, you can compare the effects of market volatilities on CCSB Financial and Washington Business 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 Washington Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCSB Financial and Washington Business.
Diversification Opportunities for CCSB Financial and Washington Business
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CCSB and Washington is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CCSB Financial Corp and Washington Business Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Business Bank 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 Washington Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Business Bank has no effect on the direction of CCSB Financial i.e., CCSB Financial and Washington Business go up and down completely randomly.
Pair Corralation between CCSB Financial and Washington Business
Given the investment horizon of 90 days CCSB Financial Corp is expected to under-perform the Washington Business. In addition to that, CCSB Financial is 1.24 times more volatile than Washington Business Bank. It trades about -0.13 of its total potential returns per unit of risk. Washington Business Bank is currently generating about 0.18 per unit of volatility. If you would invest 3,275 in Washington Business Bank on September 2, 2024 and sell it today you would earn a total of 325.00 from holding Washington Business Bank or generate 9.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
CCSB Financial Corp vs. Washington Business Bank
Performance |
Timeline |
CCSB Financial Corp |
Washington Business Bank |
CCSB Financial and Washington Business Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CCSB Financial and Washington Business
The main advantage of trading using opposite CCSB Financial and Washington Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCSB Financial position performs unexpectedly, Washington Business 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 Washington Business will offset losses from the drop in Washington Business' long position.CCSB Financial vs. HUMANA INC | CCSB Financial vs. SCOR PK | CCSB Financial vs. Aquagold International | CCSB Financial vs. Thrivent High Yield |
Washington Business vs. Piraeus Bank SA | Washington Business vs. Turkiye Garanti Bankasi | Washington Business vs. Uwharrie Capital Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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