Correlation Between Dogecoin and FNCB Bancorp

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

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

Diversification Opportunities for Dogecoin and FNCB Bancorp

-0.46

Correlation Coefficient

Dogecoin  FNCB Bancorp

Very good diversification

The 3 months correlation between Dogecoin and FNCB is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dogecoin and FNCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNCB Bancorp and Dogecoin 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 Dogecoin are associated (or correlated) with FNCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNCB Bancorp has no effect on the direction of Dogecoin i.e., Dogecoin and FNCB Bancorp go up and down completely randomly.

Pair Corralation between Dogecoin and FNCB Bancorp

Assuming the 90 days trading horizon Dogecoin is expected to under-perform the FNCB Bancorp. In addition to that, Dogecoin is 3.0 times more volatile than FNCB Bancorp. It trades about -0.15 of its total potential returns per unit of risk. FNCB Bancorp is currently generating about -0.18 per unit of volatility. If you would invest  595.00  in FNCB Bancorp on January 31, 2024 and sell it today you would lose (37.00) from holding FNCB Bancorp or give up 6.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Dogecoin  vs.  FNCB Bancorp

Dogecoin

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dogecoin are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Dogecoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

FNCB Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FNCB Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Dogecoin and FNCB Bancorp

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

The idea behind Dogecoin and FNCB 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.