Correlation Between William Penn and Cincinnati Bancorp

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

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

Diversification Opportunities for William Penn and Cincinnati Bancorp

0.0

Correlation Coefficient

William Penn  Cincinnati Bancorp

Pay attention - limited upside

The 3 months correlation between William and Cincinnati is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding William Penn Bancorp and Cincinnati Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Bancorp and William Penn 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 William Penn Bancorp 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 William Penn i.e., William Penn and Cincinnati Bancorp go up and down completely randomly.

Pair Corralation between William Penn and Cincinnati Bancorp

If you would invest (100.00) in Cincinnati Bancorp on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Cincinnati 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

William Penn Bancorp  vs.  Cincinnati Bancorp

William Penn Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days William Penn Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm 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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with William Penn and Cincinnati Bancorp

The main advantage of trading using opposite William Penn and Cincinnati Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Penn 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 William Penn Bancorp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.