Correlation Between Now and Mifflinburg Bancorp
Can any of the company-specific risk be diversified away by investing in both Now 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 Now and Mifflinburg Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Now Inc and Mifflinburg Bancorp, you can compare the effects of market volatilities on Now 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 Now with a short position of Mifflinburg Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Now and Mifflinburg Bancorp.
Diversification Opportunities for Now and Mifflinburg Bancorp
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Now and Mifflinburg is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Now Inc and Mifflinburg Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mifflinburg Bancorp and Now 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 Now Inc 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 Now i.e., Now and Mifflinburg Bancorp go up and down completely randomly.
Pair Corralation between Now and Mifflinburg Bancorp
Given the investment horizon of 90 days Now Inc is expected to generate 4.61 times more return on investment than Mifflinburg Bancorp. However, Now is 4.61 times more volatile than Mifflinburg Bancorp. It trades about 0.19 of its potential returns per unit of risk. Mifflinburg Bancorp is currently generating about -0.35 per unit of risk. If you would invest 1,296 in Now Inc on November 9, 2024 and sell it today you would earn a total of 134.00 from holding Now Inc or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Now Inc vs. Mifflinburg Bancorp
Performance |
| Timeline |
| Now Inc |
| Mifflinburg Bancorp |
Now and Mifflinburg Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Now and Mifflinburg Bancorp
The main advantage of trading using opposite Now and Mifflinburg Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Now 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.| Now vs. Oil States International | Now vs. Oceaneering International | Now vs. Geospace Technologies | Now vs. Enerflex |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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