Correlation Between Glen Burnie and Kentucky First

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

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

Diversification Opportunities for Glen Burnie and Kentucky First

-0.47

Correlation Coefficient

Glen Burnie  Kentucky First

Very good diversification

The 3 months correlation between Glen and Kentucky is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Glen Burnie Bancorp and Kentucky First Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentucky First Federal and Glen Burnie 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 Glen Burnie Bancorp are associated (or correlated) with Kentucky First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentucky First Federal has no effect on the direction of Glen Burnie i.e., Glen Burnie and Kentucky First go up and down completely randomly.

Pair Corralation between Glen Burnie and Kentucky First

Given the investment horizon of 90 days Glen Burnie is expected to generate 2.59 times less return on investment than Kentucky First. In addition to that, Glen Burnie is 1.56 times more volatile than Kentucky First Federal. It trades about 0.04 of its total potential returns per unit of risk. Kentucky First Federal is currently generating about 0.15 per unit of volatility. If you would invest  258.00  in Kentucky First Federal on September 22, 2024 and sell it today you would earn a total of  28.00  from holding Kentucky First Federal or generate 10.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Glen Burnie Bancorp  vs.  Kentucky First Federal

Glen Burnie Bancorp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Glen Burnie Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental drivers, Glen Burnie may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kentucky First Federal

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kentucky First Federal are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting technical and fundamental indicators, Kentucky First sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Glen Burnie and Kentucky First

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

The idea behind Glen Burnie Bancorp and Kentucky First Federal 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.