Correlation Between Apple and MNB Holdings
Can any of the company-specific risk be diversified away by investing in both Apple and MNB Holdings 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 Apple and MNB Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and MNB Holdings Corp, you can compare the effects of market volatilities on Apple and MNB Holdings 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 Apple with a short position of MNB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and MNB Holdings.
Diversification Opportunities for Apple and MNB Holdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apple and MNB is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and MNB Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MNB Holdings Corp and Apple 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 Apple Inc are associated (or correlated) with MNB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MNB Holdings Corp has no effect on the direction of Apple i.e., Apple and MNB Holdings go up and down completely randomly.
Pair Corralation between Apple and MNB Holdings
Given the investment horizon of 90 days Apple Inc is expected to generate 0.62 times more return on investment than MNB Holdings. However, Apple Inc is 1.62 times less risky than MNB Holdings. It trades about 0.07 of its potential returns per unit of risk. MNB Holdings Corp is currently generating about -0.02 per unit of risk. If you would invest 15,248 in Apple Inc on November 2, 2024 and sell it today you would earn a total of 8,587 from holding Apple Inc or generate 56.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Apple Inc vs. MNB Holdings Corp
Performance |
| Timeline |
| Apple Inc |
| MNB Holdings Corp |
Apple and MNB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and MNB Holdings
The main advantage of trading using opposite Apple and MNB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, MNB Holdings 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 MNB Holdings will offset losses from the drop in MNB Holdings' long position.The idea behind Apple Inc and MNB Holdings Corp 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.| MNB Holdings vs. Harbor Bankshares | MNB Holdings vs. Oconee Financial | MNB Holdings vs. Mission Valley Bancorp | MNB Holdings vs. MF Bancorp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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