Correlation Between Finward Bancorp and Mifflinburg Bancorp
Can any of the company-specific risk be diversified away by investing in both Finward Bancorp 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 Finward Bancorp and Mifflinburg Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finward Bancorp and Mifflinburg Bancorp, you can compare the effects of market volatilities on Finward Bancorp 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 Finward Bancorp with a short position of Mifflinburg Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finward Bancorp and Mifflinburg Bancorp.
Diversification Opportunities for Finward Bancorp and Mifflinburg Bancorp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finward and Mifflinburg is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and Mifflinburg Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mifflinburg Bancorp and Finward 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 Finward Bancorp 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 Finward Bancorp i.e., Finward Bancorp and Mifflinburg Bancorp go up and down completely randomly.
Pair Corralation between Finward Bancorp and Mifflinburg Bancorp
Given the investment horizon of 90 days Finward Bancorp is expected to generate 1.43 times less return on investment than Mifflinburg Bancorp. But when comparing it to its historical volatility, Finward Bancorp is 2.02 times less risky than Mifflinburg Bancorp. It trades about 0.04 of its potential returns per unit of risk. Mifflinburg Bancorp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,249 in Mifflinburg Bancorp on November 8, 2024 and sell it today you would earn a total of 138.00 from holding Mifflinburg Bancorp or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 52.63% |
| Values | Daily Returns |
Finward Bancorp vs. Mifflinburg Bancorp
Performance |
| Timeline |
| Finward Bancorp |
| Mifflinburg Bancorp |
Finward Bancorp and Mifflinburg Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finward Bancorp and Mifflinburg Bancorp
The main advantage of trading using opposite Finward Bancorp and Mifflinburg Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp 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.| Finward Bancorp vs. US Bancorp | Finward Bancorp vs. Truist Financial Corp | Finward Bancorp vs. KeyCorp | Finward Bancorp vs. Citizens Financial Group, |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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