Correlation Between OptimumBank Holdings and Cnb Community

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

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

Diversification Opportunities for OptimumBank Holdings and Cnb Community

0.02

Correlation Coefficient

OptimumBank Holdings  Cnb Community

Significant diversification

The 3 months correlation between OptimumBank and Cnb is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding OptimumBank Holdings and Cnb Community Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cnb Community Bancorp and OptimumBank Holdings 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 OptimumBank Holdings are associated (or correlated) with Cnb Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cnb Community Bancorp has no effect on the direction of OptimumBank Holdings i.e., OptimumBank Holdings and Cnb Community go up and down completely randomly.

Pair Corralation between OptimumBank Holdings and Cnb Community

If you would invest  452.00  in OptimumBank Holdings on September 5, 2024 and sell it today you would earn a total of  51.00  from holding OptimumBank Holdings or generate 11.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

OptimumBank Holdings  vs.  Cnb Community Bancorp

OptimumBank Holdings

Risk-Adjusted Performance

7 of 100

OK

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

Cnb Community Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with OptimumBank Holdings and Cnb Community

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

The idea behind OptimumBank Holdings and Cnb Community 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.