Correlation Between BCB Bancorp and Malaga Financial
Can any of the company-specific risk be diversified away by investing in both BCB Bancorp 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 BCB Bancorp and Malaga Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCB Bancorp and Malaga Financial, you can compare the effects of market volatilities on BCB Bancorp 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 BCB Bancorp with a short position of Malaga Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCB Bancorp and Malaga Financial.
Diversification Opportunities for BCB Bancorp and Malaga Financial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between BCB and Malaga is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BCB Bancorp and Malaga Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaga Financial and BCB 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 BCB Bancorp 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 BCB Bancorp i.e., BCB Bancorp and Malaga Financial go up and down completely randomly.
Pair Corralation between BCB Bancorp and Malaga Financial
Given the investment horizon of 90 days BCB Bancorp is expected to generate 6.27 times more return on investment than Malaga Financial. However, BCB Bancorp is 6.27 times more volatile than Malaga Financial. It trades about 0.21 of its potential returns per unit of risk. Malaga Financial is currently generating about -0.14 per unit of risk. If you would invest 1,178 in BCB Bancorp on August 24, 2024 and sell it today you would earn a total of 119.00 from holding BCB Bancorp or generate 10.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BCB Bancorp vs. Malaga Financial
Performance |
| Timeline |
| BCB Bancorp |
| Malaga Financial |
BCB Bancorp and Malaga Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCB Bancorp and Malaga Financial
The main advantage of trading using opposite BCB Bancorp and Malaga Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCB Bancorp 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.| BCB Bancorp vs. Provident Financial Services | BCB Bancorp vs. First Mid Illinois | BCB Bancorp vs. ConnectOne Bancorp | BCB Bancorp vs. Finward Bancorp |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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