Correlation Between MCAN Mortgage and First Bankers
Can any of the company-specific risk be diversified away by investing in both MCAN Mortgage and First Bankers 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 MCAN Mortgage and First Bankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCAN Mortgage and First Bankers Trustshares, you can compare the effects of market volatilities on MCAN Mortgage and First Bankers 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 MCAN Mortgage with a short position of First Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCAN Mortgage and First Bankers.
Diversification Opportunities for MCAN Mortgage and First Bankers
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between MCAN and First is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding MCAN Mortgage and First Bankers Trustshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bankers Trustshares and MCAN Mortgage 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 MCAN Mortgage are associated (or correlated) with First Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bankers Trustshares has no effect on the direction of MCAN Mortgage i.e., MCAN Mortgage and First Bankers go up and down completely randomly.
Pair Corralation between MCAN Mortgage and First Bankers
Assuming the 90 days horizon MCAN Mortgage is expected to generate 1.98 times less return on investment than First Bankers. But when comparing it to its historical volatility, MCAN Mortgage is 1.67 times less risky than First Bankers. It trades about 0.05 of its potential returns per unit of risk. First Bankers Trustshares is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,461 in First Bankers Trustshares on November 3, 2024 and sell it today you would earn a total of 143.00 from holding First Bankers Trustshares or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
MCAN Mortgage vs. First Bankers Trustshares
Performance |
| Timeline |
| MCAN Mortgage |
| First Bankers Trustshares |
MCAN Mortgage and First Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCAN Mortgage and First Bankers
The main advantage of trading using opposite MCAN Mortgage and First Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCAN Mortgage position performs unexpectedly, First Bankers 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 First Bankers will offset losses from the drop in First Bankers' long position.| MCAN Mortgage vs. Guild Holdings Co | MCAN Mortgage vs. Mr Cooper Group | MCAN Mortgage vs. Encore Capital Group | MCAN Mortgage vs. CNFinance Holdings |
| First Bankers vs. Greenville Federal Financial | First Bankers vs. First Ottawa Bancshares | First Bankers vs. Coastal Carolina Bancshares | First Bankers vs. Citizens Bancorp Investment |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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