Correlation Between CF Bankshares and Sturgis Bancorp

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

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

Diversification Opportunities for CF Bankshares and Sturgis Bancorp

0.0

Correlation Coefficient

CF Bankshares  Sturgis Bancorp

Pay attention - limited upside

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

Pair Corralation between CF Bankshares and Sturgis Bancorp

If you would invest  1,878  in CF Bankshares on March 11, 2024 and sell it today you would earn a total of  92.00  from holding CF Bankshares or generate 4.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

CF Bankshares  vs.  Sturgis Bancorp

CF Bankshares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CF Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Sturgis Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sturgis Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Sturgis Bancorp is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with CF Bankshares and Sturgis Bancorp

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

The idea behind CF Bankshares and Sturgis 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.