Correlation Between First Bancshares and CCSB Financial

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

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

Diversification Opportunities for First Bancshares and CCSB Financial

-0.25

Correlation Coefficient

First Bancshares  CCSB Financial

Very good diversification

The 3 months correlation between First and CCSB is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding First Bancshares and CCSB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCSB Financial Corp and First 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 First Bancshares are associated (or correlated) with CCSB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCSB Financial Corp has no effect on the direction of First Bancshares i.e., First Bancshares and CCSB Financial go up and down completely randomly.

Pair Corralation between First Bancshares and CCSB Financial

If you would invest  1,169  in CCSB Financial Corp on September 20, 2024 and sell it today you would earn a total of  21.00  from holding CCSB Financial Corp or generate 1.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

First Bancshares  vs.  CCSB Financial Corp

First Bancshares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, First Bancshares is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

CCSB Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CCSB Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, CCSB Financial is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with First Bancshares and CCSB Financial

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

The idea behind First Bancshares and CCSB Financial Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.