Correlation Between LCNB and Cincinnati Bancorp

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

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

Diversification Opportunities for LCNB and Cincinnati Bancorp

0.0

Correlation Coefficient

LCNB  Cincinnati Bancorp

Pay attention - limited upside

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

Pair Corralation between LCNB and Cincinnati Bancorp

If you would invest  1,485  in LCNB Corporation on December 29, 2024 and sell it today you would earn a total of  12.00  from holding LCNB Corporation or generate 0.81% return on investment over 90 days.

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

LCNB Corp.  vs.  Cincinnati Bancorp

LCNB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LCNB Corporation are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, LCNB is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Cincinnati Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cincinnati Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cincinnati Bancorp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LCNB and Cincinnati Bancorp

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

The idea behind LCNB Corporation and Cincinnati 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.