Correlation Between CoastalSouth Bancshares and CCCB Bancorp

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

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

Diversification Opportunities for CoastalSouth Bancshares and CCCB Bancorp

0.05

Correlation Coefficient

CoastalSouth Bancshares  CCCB Bancorp

Significant diversification

The 3 months correlation between CoastalSouth and CCCB is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CoastalSouth Bancshares and CCCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCCB Bancorp and CoastalSouth Bancshares 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 CoastalSouth Bancshares are associated (or correlated) with CCCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCCB Bancorp has no effect on the direction of CoastalSouth Bancshares i.e., CoastalSouth Bancshares and CCCB Bancorp go up and down completely randomly.

Pair Corralation between CoastalSouth Bancshares and CCCB Bancorp

Given the investment horizon of 90 days CoastalSouth Bancshares is expected to under-perform the CCCB Bancorp. But the otc stock apears to be less risky and, when comparing its historical volatility, CoastalSouth Bancshares is 1.46 times less risky than CCCB Bancorp. The otc stock trades about -0.04 of its potential returns per unit of risk. The CCCB Bancorp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  555.00  in CCCB Bancorp on December 4, 2024 and sell it today you would lose (2.00) from holding CCCB Bancorp or give up 0.36% of portfolio value over 90 days.

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

CoastalSouth Bancshares  vs.  CCCB Bancorp

CoastalSouth Bancshares

Risk-Adjusted Performance

Very Weak

Over the last 90 days CoastalSouth Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, CoastalSouth Bancshares is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CCCB Bancorp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CCCB Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, CCCB Bancorp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CoastalSouth Bancshares and CCCB Bancorp

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

The idea behind CoastalSouth Bancshares and CCCB 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.