Correlation Between MF Bancorp and Coeur DAlene
Can any of the company-specific risk be diversified away by investing in both MF Bancorp and Coeur DAlene 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 MF Bancorp and Coeur DAlene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MF Bancorp and Coeur dAlene Bancorp, you can compare the effects of market volatilities on MF Bancorp and Coeur DAlene 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 MF Bancorp with a short position of Coeur DAlene. Check out your portfolio center. Please also check ongoing floating volatility patterns of MF Bancorp and Coeur DAlene.
Diversification Opportunities for MF Bancorp and Coeur DAlene
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MFBP and Coeur is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding MF Bancorp and Coeur dAlene Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur dAlene Bancorp and MF Bancorp 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 MF Bancorp are associated (or correlated) with Coeur DAlene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coeur dAlene Bancorp has no effect on the direction of MF Bancorp i.e., MF Bancorp and Coeur DAlene go up and down completely randomly.
Pair Corralation between MF Bancorp and Coeur DAlene
Given the investment horizon of 90 days MF Bancorp is expected to generate 31.77 times more return on investment than Coeur DAlene. However, MF Bancorp is 31.77 times more volatile than Coeur dAlene Bancorp. It trades about 0.01 of its potential returns per unit of risk. Coeur dAlene Bancorp is currently generating about 0.22 per unit of risk. If you would invest 1,899 in MF Bancorp on September 25, 2024 and sell it today you would earn a total of 1.00 from holding MF Bancorp or generate 0.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.24% |
Values | Daily Returns |
MF Bancorp vs. Coeur dAlene Bancorp
Performance |
Timeline |
MF Bancorp |
Coeur dAlene Bancorp |
MF Bancorp and Coeur DAlene Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MF Bancorp and Coeur DAlene
The main advantage of trading using opposite MF Bancorp and Coeur DAlene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MF Bancorp position performs unexpectedly, Coeur DAlene 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 Coeur DAlene will offset losses from the drop in Coeur DAlene's long position.MF Bancorp vs. Citizens Financial Corp | MF Bancorp vs. Farmers Bancorp | MF Bancorp vs. Alpine Banks of | MF Bancorp vs. Taylor Calvin B |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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