Correlation Between Kentucky First and High Country

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

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

Diversification Opportunities for Kentucky First and High Country

0.0

Correlation Coefficient

Kentucky First  High Country

Pay attention - limited upside

The 3 months correlation between Kentucky and High is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kentucky First Federal and High Country Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Country Bancorp and Kentucky First 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 Kentucky First Federal are associated (or correlated) with High Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Country Bancorp has no effect on the direction of Kentucky First i.e., Kentucky First and High Country go up and down completely randomly.

Pair Corralation between Kentucky First and High Country

If you would invest (100.00) in High Country Bancorp on December 28, 2024 and sell it today you would earn a total of  100.00  from holding High Country Bancorp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Kentucky First Federal  vs.  High Country Bancorp

Kentucky First Federal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kentucky First Federal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Kentucky First is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

High Country Bancorp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Kentucky First and High Country

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

The idea behind Kentucky First Federal and High Country 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.