Correlation Between Muncy Bank and CCFNB Bancorp

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

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

Diversification Opportunities for Muncy Bank and CCFNB Bancorp

0.56

Correlation Coefficient

Muncy Bank  CCFNB Bancorp

Very weak diversification

The 3 months correlation between Muncy and CCFNB is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Muncy Bank Financial and CCFNB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCFNB Bancorp and Muncy Bank 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 Muncy Bank Financial 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 Muncy Bank i.e., Muncy Bank and CCFNB Bancorp go up and down completely randomly.

Pair Corralation between Muncy Bank and CCFNB Bancorp

If you would invest  3,448  in CCFNB Bancorp on September 4, 2024 and sell it today you would earn a total of  402.00  from holding CCFNB Bancorp or generate 11.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.61%
Values	Daily Returns

Muncy Bank Financial  vs.  CCFNB Bancorp

Muncy Bank Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Muncy Bank Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Muncy Bank is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

CCFNB Bancorp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CCFNB Bancorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, CCFNB Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Muncy Bank and CCFNB Bancorp

The main advantage of trading using opposite Muncy Bank and CCFNB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muncy Bank 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 Muncy Bank Financial 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.