Correlation Between Century Financial and Mifflinburg Bancorp
Can any of the company-specific risk be diversified away by investing in both Century Financial and Mifflinburg 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 Century Financial and Mifflinburg Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Financial Corp and Mifflinburg Bancorp, you can compare the effects of market volatilities on Century Financial and Mifflinburg 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 Century Financial with a short position of Mifflinburg Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Financial and Mifflinburg Bancorp.
Diversification Opportunities for Century Financial and Mifflinburg Bancorp
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Century and Mifflinburg is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Century Financial Corp and Mifflinburg Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mifflinburg Bancorp and Century 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 Century Financial Corp are associated (or correlated) with Mifflinburg Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mifflinburg Bancorp has no effect on the direction of Century Financial i.e., Century Financial and Mifflinburg Bancorp go up and down completely randomly.
Pair Corralation between Century Financial and Mifflinburg Bancorp
Given the investment horizon of 90 days Century Financial Corp is expected to generate 0.47 times more return on investment than Mifflinburg Bancorp. However, Century Financial Corp is 2.12 times less risky than Mifflinburg Bancorp. It trades about 0.16 of its potential returns per unit of risk. Mifflinburg Bancorp is currently generating about 0.01 per unit of risk. If you would invest 2,449 in Century Financial Corp on September 1, 2024 and sell it today you would earn a total of 1,301 from holding Century Financial Corp or generate 53.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.78% |
| Values | Daily Returns |
Century Financial Corp vs. Mifflinburg Bancorp
Performance |
| Timeline |
| Century Financial Corp |
| Mifflinburg Bancorp |
Century Financial and Mifflinburg Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Financial and Mifflinburg Bancorp
The main advantage of trading using opposite Century Financial and Mifflinburg Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Financial position performs unexpectedly, Mifflinburg 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 Mifflinburg Bancorp will offset losses from the drop in Mifflinburg Bancorp's long position.| Century Financial vs. Eastern Michigan Financial | Century Financial vs. Grand River Commerce | Century Financial vs. Bank of Botetourt | Century Financial vs. FNB Inc |
| Mifflinburg Bancorp vs. Mauch Chunk Trust | Mifflinburg Bancorp vs. Juniata Valley Financial | Mifflinburg Bancorp vs. MBT Bancshares |
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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