Correlation Between Codorus Valley and BancFirst

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

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

Diversification Opportunities for Codorus Valley and BancFirst

0.14

Correlation Coefficient

Codorus Valley  BancFirst

Average diversification

The 3 months correlation between Codorus and BancFirst is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Codorus Valley Bancorp and BancFirst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BancFirst and Codorus Valley 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 Codorus Valley Bancorp are associated (or correlated) with BancFirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BancFirst has no effect on the direction of Codorus Valley i.e., Codorus Valley and BancFirst go up and down completely randomly.

Pair Corralation between Codorus Valley and BancFirst

If you would invest  10,525  in BancFirst on September 30, 2024 and sell it today you would earn a total of  1,464  from holding BancFirst or generate 13.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Codorus Valley Bancorp  vs.  BancFirst

Codorus Valley Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

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

BancFirst

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BancFirst are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, BancFirst reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Codorus Valley and BancFirst

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

The idea behind Codorus Valley Bancorp and BancFirst 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 Transaction History module to view history of all your transactions and understand their impact on performance.