Correlation Between CCFNB Bancorp and Kentucky First

Can any of the company-specific risk be diversified away by investing in both CCFNB Bancorp and Kentucky First 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 CCFNB Bancorp and Kentucky First into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CCFNB Bancorp and Kentucky First Federal, you can compare the effects of market volatilities on CCFNB Bancorp and Kentucky First 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 CCFNB Bancorp with a short position of Kentucky First. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCFNB Bancorp and Kentucky First.

Diversification Opportunities for CCFNB Bancorp and Kentucky First

-0.21

Correlation Coefficient

CCFNB Bancorp  Kentucky First

Very good diversification

The 3 months correlation between CCFNB and Kentucky is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding CCFNB Bancorp and Kentucky First Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentucky First Federal and CCFNB Bancorp 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 CCFNB Bancorp are associated (or correlated) with Kentucky First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentucky First Federal has no effect on the direction of CCFNB Bancorp i.e., CCFNB Bancorp and Kentucky First go up and down completely randomly.

Pair Corralation between CCFNB Bancorp and Kentucky First

Given the investment horizon of 90 days CCFNB Bancorp is expected to generate 0.8 times more return on investment than Kentucky First. However, CCFNB Bancorp is 1.25 times less risky than Kentucky First. It trades about 0.24 of its potential returns per unit of risk. Kentucky First Federal is currently generating about 0.15 per unit of risk. If you would invest  3,582  in CCFNB Bancorp on September 22, 2024 and sell it today you would earn a total of  549.00  from holding CCFNB Bancorp or generate 15.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CCFNB Bancorp  vs.  Kentucky First Federal

CCFNB Bancorp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CCFNB Bancorp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, CCFNB Bancorp displayed solid returns over the last few months and may actually be approaching a breakup point.

Kentucky First Federal

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kentucky First Federal are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting technical and fundamental indicators, Kentucky First sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CCFNB Bancorp and Kentucky First

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

The idea behind CCFNB Bancorp and Kentucky First Federal 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.