Correlation Between CCSB Financial and Washington Business

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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 Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy98.46%
ValuesDaily Returns

CCSB Financial Corp  vs.  Washington Business Bank

 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 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.
Washington Business Bank 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Washington Business Bank are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Washington Business may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.
The idea behind CCSB Financial Corp and Washington Business Bank 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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