Correlation Between CF Bankshares and Mid Southern

Can any of the company-specific risk be diversified away by investing in both CF Bankshares and Mid Southern 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 CF Bankshares and Mid Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for CF Bankshares and Mid Southern

0.44

Correlation Coefficient

CF Bankshares  Mid Southern

Very weak diversification

The 3 months correlation between CFBK and Mid is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CF Bankshares and Mid Southern Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Southern Bancorp and CF Bankshares 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 CF Bankshares are associated (or correlated) with Mid Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Southern Bancorp has no effect on the direction of CF Bankshares i.e., CF Bankshares and Mid Southern go up and down completely randomly.

Pair Corralation between CF Bankshares and Mid Southern

If you would invest  1,270  in Mid Southern Bancorp on September 21, 2024 and sell it today you would earn a total of  0.00  from holding Mid Southern Bancorp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

CF Bankshares  vs.  Mid Southern Bancorp

CF Bankshares

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CF Bankshares are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental drivers, CF Bankshares disclosed solid returns over the last few months and may actually be approaching a breakup point.

Mid Southern Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mid Southern Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Mid Southern is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CF Bankshares and Mid Southern

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

The idea behind CF Bankshares and Mid Southern Bancorp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.