Correlation Between CCFNB Bancorp and Susquehanna Community

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

By analyzing existing cross correlation between CCFNB Bancorp and Susquehanna Community Financial, you can compare the effects of market volatilities on CCFNB Bancorp and Susquehanna Community 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 Susquehanna Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCFNB Bancorp and Susquehanna Community.

Diversification Opportunities for CCFNB Bancorp and Susquehanna Community

-0.09

Correlation Coefficient

CCFNB Bancorp  Susquehanna Community

Good diversification

The 3 months correlation between CCFNB and Susquehanna is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding CCFNB Bancorp and Susquehanna Community Financia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Susquehanna Community 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 Susquehanna Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Susquehanna Community has no effect on the direction of CCFNB Bancorp i.e., CCFNB Bancorp and Susquehanna Community go up and down completely randomly.

Pair Corralation between CCFNB Bancorp and Susquehanna Community

Given the investment horizon of 90 days CCFNB Bancorp is expected to generate 2.75 times more return on investment than Susquehanna Community. However, CCFNB Bancorp is 2.75 times more volatile than Susquehanna Community Financial. It trades about 0.02 of its potential returns per unit of risk. Susquehanna Community Financial is currently generating about -0.19 per unit of risk. If you would invest  4,086  in CCFNB Bancorp on December 30, 2024 and sell it today you would earn a total of  64.00  from holding CCFNB Bancorp or generate 1.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

CCFNB Bancorp  vs.  Susquehanna Community Financia

CCFNB Bancorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CCFNB Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, CCFNB Bancorp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Susquehanna Community

Risk-Adjusted Performance

Very Weak

Over the last 90 days Susquehanna Community Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CCFNB Bancorp and Susquehanna Community

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

The idea behind CCFNB Bancorp and Susquehanna Community Financial 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.