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

Good 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 generate 1.24 times more return on investment than CCCB Bancorp. However, CoastalSouth Bancshares is 1.24 times more volatile than CCCB Bancorp. It trades about 0.01 of its potential returns per unit of risk. CCCB Bancorp is currently generating about -0.04 per unit of risk. If you would invest  2,100  in CoastalSouth Bancshares on December 29, 2024 and sell it today you would earn a total of  0.00  from holding CoastalSouth Bancshares or generate 0.0% return on investment over 90 days.

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

Very Weak

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

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..