Correlation Between Berkshire Hills and Magyar Bancorp
Can any of the company-specific risk be diversified away by investing in both Berkshire Hills and Magyar 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 Berkshire Hills and Magyar Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hills Bancorp and Magyar Bancorp, you can compare the effects of market volatilities on Berkshire Hills and Magyar 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 Berkshire Hills with a short position of Magyar Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hills and Magyar Bancorp.
Diversification Opportunities for Berkshire Hills and Magyar Bancorp
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Berkshire and Magyar is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hills Bancorp and Magyar Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magyar Bancorp and Berkshire Hills 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 Berkshire Hills Bancorp are associated (or correlated) with Magyar Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magyar Bancorp has no effect on the direction of Berkshire Hills i.e., Berkshire Hills and Magyar Bancorp go up and down completely randomly.
Pair Corralation between Berkshire Hills and Magyar Bancorp
Given the investment horizon of 90 days Berkshire Hills Bancorp is expected to generate 1.44 times more return on investment than Magyar Bancorp. However, Berkshire Hills is 1.44 times more volatile than Magyar Bancorp. It trades about 0.15 of its potential returns per unit of risk. Magyar Bancorp is currently generating about 0.15 per unit of risk. If you would invest 2,128 in Berkshire Hills Bancorp on September 1, 2024 and sell it today you would earn a total of 920.00 from holding Berkshire Hills Bancorp or generate 43.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Berkshire Hills Bancorp vs. Magyar Bancorp
Performance |
| Timeline |
| Berkshire Hills Bancorp |
| Magyar Bancorp |
Berkshire Hills and Magyar Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hills and Magyar Bancorp
The main advantage of trading using opposite Berkshire Hills and Magyar Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hills position performs unexpectedly, Magyar 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 Magyar Bancorp will offset losses from the drop in Magyar Bancorp's long position.| Berkshire Hills vs. Finward Bancorp | Berkshire Hills vs. Community West Bancshares | Berkshire Hills vs. First Community | Berkshire Hills vs. First Capital |
| Magyar Bancorp vs. Home Federal Bancorp | Magyar Bancorp vs. Community West Bancshares | Magyar Bancorp vs. First Financial Northwest | Magyar Bancorp vs. First Northwest 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |