Correlation Between Bank of Marin and MT Bank
Can any of the company-specific risk be diversified away by investing in both Bank of Marin and MT Bank 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 Bank of Marin and MT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Marin and MT Bank, you can compare the effects of market volatilities on Bank of Marin and MT Bank 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 Bank of Marin with a short position of MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Marin and MT Bank.
Diversification Opportunities for Bank of Marin and MT Bank
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and MTB is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Marin and MT Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank and Bank of Marin 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 Bank of Marin are associated (or correlated) with MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank has no effect on the direction of Bank of Marin i.e., Bank of Marin and MT Bank go up and down completely randomly.
Pair Corralation between Bank of Marin and MT Bank
Given the investment horizon of 90 days Bank of Marin is expected to generate 1.39 times less return on investment than MT Bank. In addition to that, Bank of Marin is 1.39 times more volatile than MT Bank. It trades about 0.05 of its total potential returns per unit of risk. MT Bank is currently generating about 0.09 per unit of volatility. If you would invest 12,273 in MT Bank on August 31, 2024 and sell it today you would earn a total of 9,726 from holding MT Bank or generate 79.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Marin vs. MT Bank
Performance |
| Timeline |
| Bank of Marin |
| MT Bank |
Bank of Marin and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Marin and MT Bank
The main advantage of trading using opposite Bank of Marin and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Marin position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank's long position.| Bank of Marin vs. Community West Bancshares | Bank of Marin vs. Heritage Financial | Bank of Marin vs. First Financial Northwest | Bank of Marin vs. Sierra Bancorp |
| MT Bank vs. US Bancorp | MT Bank vs. Truist Financial Corp | MT Bank vs. Fifth Third Bancorp | MT Bank vs. KeyCorp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |