Correlation Between HP and MF Bancorp
Can any of the company-specific risk be diversified away by investing in both HP and MF 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 HP and MF Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and MF Bancorp, you can compare the effects of market volatilities on HP and MF 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 HP with a short position of MF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and MF Bancorp.
Diversification Opportunities for HP and MF Bancorp
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between HP and MFBP is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and MF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MF Bancorp and HP 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 HP Inc are associated (or correlated) with MF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MF Bancorp has no effect on the direction of HP i.e., HP and MF Bancorp go up and down completely randomly.
Pair Corralation between HP and MF Bancorp
Considering the 90-day investment horizon HP Inc is expected to under-perform the MF Bancorp. In addition to that, HP is 1.49 times more volatile than MF Bancorp. It trades about -0.07 of its total potential returns per unit of risk. MF Bancorp is currently generating about 0.14 per unit of volatility. If you would invest 1,795 in MF Bancorp on September 14, 2024 and sell it today you would earn a total of 105.00 from holding MF Bancorp or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. MF Bancorp
Performance |
| Timeline |
| HP Inc |
| MF Bancorp |
HP and MF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and MF Bancorp
The main advantage of trading using opposite HP and MF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, MF 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 MF Bancorp will offset losses from the drop in MF Bancorp's long position.The idea behind HP Inc and MF Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MF Bancorp vs. Freedom Bank of | MF Bancorp vs. HUMANA INC | MF Bancorp vs. Barloworld Ltd ADR | MF Bancorp vs. Morningstar Unconstrained Allocation |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |