Correlation Between Harbor Bankshares and Mid Southern
Can any of the company-specific risk be diversified away by investing in both Harbor Bankshares and Mid Southern 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 Mid Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harbor Bankshares and Mid Southern Bancorp, you can compare the effects of market volatilities on Harbor Bankshares and Mid Southern 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 Mid Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Bankshares and Mid Southern.
Diversification Opportunities for Harbor Bankshares and Mid Southern
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harbor and Mid is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Bankshares and Mid Southern Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Southern 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 Mid Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Southern Bancorp has no effect on the direction of Harbor Bankshares i.e., Harbor Bankshares and Mid Southern go up and down completely randomly.
Pair Corralation between Harbor Bankshares and Mid Southern
Given the investment horizon of 90 days Harbor Bankshares is expected to under-perform the Mid Southern. In addition to that, Harbor Bankshares is 1.4 times more volatile than Mid Southern Bancorp. It trades about -0.01 of its total potential returns per unit of risk. Mid Southern Bancorp is currently generating about 0.22 per unit of volatility. If you would invest 1,050 in Mid Southern Bancorp on September 1, 2024 and sell it today you would earn a total of 220.00 from holding Mid Southern Bancorp or generate 20.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 10.91% |
| Values | Daily Returns |
Harbor Bankshares vs. Mid Southern Bancorp
Performance |
| Timeline |
| Harbor Bankshares |
| Mid Southern Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Harbor Bankshares and Mid Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor Bankshares and Mid Southern
The main advantage of trading using opposite Harbor Bankshares and Mid Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Bankshares position performs unexpectedly, Mid Southern 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 Mid Southern will offset losses from the drop in Mid Southern'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 |
| Mid Southern vs. Community West Bancshares | Mid Southern vs. First Financial Northwest | Mid Southern vs. CF Bankshares | Mid Southern vs. Home Federal 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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