Correlation Between Harbor Bankshares and MF Bancorp
Can any of the company-specific risk be diversified away by investing in both Harbor Bankshares 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 Harbor Bankshares and MF Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harbor Bankshares and MF Bancorp, you can compare the effects of market volatilities on Harbor Bankshares 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 Harbor Bankshares with a short position of MF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Bankshares and MF Bancorp.
Diversification Opportunities for Harbor Bankshares and MF Bancorp
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harbor and MFBP is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Bankshares and MF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MF Bancorp and Harbor Bankshares 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 Harbor Bankshares 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 Harbor Bankshares i.e., Harbor Bankshares and MF Bancorp go up and down completely randomly.
Pair Corralation between Harbor Bankshares and MF Bancorp
Given the investment horizon of 90 days Harbor Bankshares is expected to generate 1.23 times more return on investment than MF Bancorp. However, Harbor Bankshares is 1.23 times more volatile than MF Bancorp. It trades about 0.28 of its potential returns per unit of risk. MF Bancorp is currently generating about 0.07 per unit of risk. If you would invest 1,310 in Harbor Bankshares on November 2, 2024 and sell it today you would earn a total of 530.00 from holding Harbor Bankshares or generate 40.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbor Bankshares vs. MF Bancorp
Performance |
| Timeline |
| Harbor Bankshares |
| MF Bancorp |
Harbor Bankshares and MF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor Bankshares and MF Bancorp
The main advantage of trading using opposite Harbor Bankshares and MF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Bankshares 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.| Harbor Bankshares vs. MNB Holdings Corp | Harbor Bankshares vs. Oconee Financial | Harbor Bankshares vs. Mission Valley Bancorp | Harbor Bankshares vs. Merchants Marine Bancorp |
| MF Bancorp vs. Citizens Bancshares Corp | MF Bancorp vs. Harbor Bankshares | MF Bancorp vs. United Bancorporation of | MF Bancorp vs. KS 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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