Correlation Between Arrow Financial and Malaga Financial
Can any of the company-specific risk be diversified away by investing in both Arrow Financial and Malaga Financial 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 Arrow Financial and Malaga Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Financial and Malaga Financial, you can compare the effects of market volatilities on Arrow Financial and Malaga Financial 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 Arrow Financial with a short position of Malaga Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Financial and Malaga Financial.
Diversification Opportunities for Arrow Financial and Malaga Financial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arrow and Malaga is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Financial and Malaga Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaga Financial and Arrow Financial 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 Arrow Financial are associated (or correlated) with Malaga Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaga Financial has no effect on the direction of Arrow Financial i.e., Arrow Financial and Malaga Financial go up and down completely randomly.
Pair Corralation between Arrow Financial and Malaga Financial
Given the investment horizon of 90 days Arrow Financial is expected to under-perform the Malaga Financial. In addition to that, Arrow Financial is 1.27 times more volatile than Malaga Financial. It trades about -0.14 of its total potential returns per unit of risk. Malaga Financial is currently generating about -0.04 per unit of volatility. If you would invest 2,120 in Malaga Financial on November 27, 2024 and sell it today you would lose (27.00) from holding Malaga Financial or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Financial vs. Malaga Financial
Performance |
| Timeline |
| Arrow Financial |
| Malaga Financial |
Arrow Financial and Malaga Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Financial and Malaga Financial
The main advantage of trading using opposite Arrow Financial and Malaga Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Financial position performs unexpectedly, Malaga Financial 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 Malaga Financial will offset losses from the drop in Malaga Financial's long position.| Arrow Financial vs. Heritage Commerce Corp | Arrow Financial vs. Westamerica Bancorporation | Arrow Financial vs. Heritage Financial | Arrow Financial vs. National Bankshares |
| Malaga Financial vs. MF Bancorp | Malaga Financial vs. United Bancorporation of | Malaga Financial vs. Harbor Bankshares | Malaga Financial vs. BankFirst Capital |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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