Correlation Between First IC and CCFNB Bancorp

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

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

Diversification Opportunities for First IC and CCFNB Bancorp

0.17

Correlation Coefficient

First IC  CCFNB Bancorp

Average diversification

The 3 months correlation between First and CCFNB is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding First IC and CCFNB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCFNB Bancorp and First IC 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 IC are associated (or correlated) with CCFNB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCFNB Bancorp has no effect on the direction of First IC i.e., First IC and CCFNB Bancorp go up and down completely randomly.

Pair Corralation between First IC and CCFNB Bancorp

Given the investment horizon of 90 days First IC is expected to generate 3.67 times more return on investment than CCFNB Bancorp. However, First IC is 3.67 times more volatile than CCFNB Bancorp. It trades about 0.22 of its potential returns per unit of risk. CCFNB Bancorp is currently generating about 0.03 per unit of risk. If you would invest  930.00  in First IC on December 27, 2024 and sell it today you would earn a total of  795.00  from holding First IC or generate 85.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	89.83%
Values	Daily Returns

First IC  vs.  CCFNB Bancorp

First IC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First IC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, First IC sustained solid returns over the last few months and may actually be approaching a breakup point.

CCFNB Bancorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CCFNB Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, CCFNB Bancorp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with First IC and CCFNB Bancorp

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

The idea behind First IC and CCFNB 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.