Correlation Between CF Bankshares and Magyar Bancorp
Can any of the company-specific risk be diversified away by investing in both CF Bankshares 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 CF Bankshares and Magyar Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Bankshares and Magyar Bancorp, you can compare the effects of market volatilities on CF Bankshares 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 CF Bankshares with a short position of Magyar Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Bankshares and Magyar Bancorp.
Diversification Opportunities for CF Bankshares and Magyar Bancorp
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CFBK and Magyar is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CF Bankshares and Magyar Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magyar Bancorp and CF Bankshares 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 CF Bankshares 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 CF Bankshares i.e., CF Bankshares and Magyar Bancorp go up and down completely randomly.
Pair Corralation between CF Bankshares and Magyar Bancorp
Given the investment horizon of 90 days CF Bankshares is expected to generate 1.44 times more return on investment than Magyar Bancorp. However, CF Bankshares is 1.44 times more volatile than Magyar Bancorp. It trades about 0.16 of its potential returns per unit of risk. Magyar Bancorp is currently generating about 0.09 per unit of risk. If you would invest 2,283 in CF Bankshares on November 9, 2024 and sell it today you would earn a total of 168.00 from holding CF Bankshares or generate 7.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
CF Bankshares vs. Magyar Bancorp
Performance |
| Timeline |
| CF Bankshares |
| Magyar Bancorp |
CF Bankshares and Magyar Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Bankshares and Magyar Bancorp
The main advantage of trading using opposite CF Bankshares and Magyar Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Bankshares 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.| CF Bankshares vs. Magyar Bancorp | CF Bankshares vs. Home Federal Bancorp | CF Bankshares vs. Community West Bancshares | CF Bankshares vs. First Financial Northwest |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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