Correlation Between ESSA Bancorp and Magyar Bancorp
Can any of the company-specific risk be diversified away by investing in both ESSA Bancorp 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 ESSA Bancorp and Magyar Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESSA Bancorp and Magyar Bancorp, you can compare the effects of market volatilities on ESSA Bancorp 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 ESSA Bancorp with a short position of Magyar Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESSA Bancorp and Magyar Bancorp.
Diversification Opportunities for ESSA Bancorp and Magyar Bancorp
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ESSA and Magyar is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ESSA Bancorp and Magyar Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magyar Bancorp and ESSA Bancorp 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 ESSA 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 ESSA Bancorp i.e., ESSA Bancorp and Magyar Bancorp go up and down completely randomly.
Pair Corralation between ESSA Bancorp and Magyar Bancorp
Given the investment horizon of 90 days ESSA Bancorp is expected to generate 0.94 times more return on investment than Magyar Bancorp. However, ESSA Bancorp is 1.06 times less risky than Magyar Bancorp. It trades about 0.32 of its potential returns per unit of risk. Magyar Bancorp is currently generating about -0.04 per unit of risk. If you would invest 1,914 in ESSA Bancorp on November 3, 2024 and sell it today you would earn a total of 177.00 from holding ESSA Bancorp or generate 9.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
ESSA Bancorp vs. Magyar Bancorp
Performance |
| Timeline |
| ESSA Bancorp |
| Magyar Bancorp |
ESSA Bancorp and Magyar Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESSA Bancorp and Magyar Bancorp
The main advantage of trading using opposite ESSA Bancorp and Magyar Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESSA Bancorp 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.| ESSA Bancorp vs. Community West Bancshares | ESSA Bancorp vs. First Northwest Bancorp | ESSA Bancorp vs. First Community | ESSA Bancorp vs. Oak Valley Bancorp |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |