Correlation Between Middlefield Banc and Civista Bancshares
Can any of the company-specific risk be diversified away by investing in both Middlefield Banc and Civista Bancshares 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 Middlefield Banc and Civista Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Middlefield Banc and Civista Bancshares, you can compare the effects of market volatilities on Middlefield Banc and Civista Bancshares 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 Middlefield Banc with a short position of Civista Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Middlefield Banc and Civista Bancshares.
Diversification Opportunities for Middlefield Banc and Civista Bancshares
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Middlefield and Civista is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Middlefield Banc and Civista Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civista Bancshares and Middlefield Banc 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 Middlefield Banc are associated (or correlated) with Civista Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civista Bancshares has no effect on the direction of Middlefield Banc i.e., Middlefield Banc and Civista Bancshares go up and down completely randomly.
Pair Corralation between Middlefield Banc and Civista Bancshares
Given the investment horizon of 90 days Middlefield Banc is expected to generate 9.72 times less return on investment than Civista Bancshares. In addition to that, Middlefield Banc is 1.35 times more volatile than Civista Bancshares. It trades about 0.0 of its total potential returns per unit of risk. Civista Bancshares is currently generating about 0.06 per unit of volatility. If you would invest 1,617 in Civista Bancshares on November 9, 2024 and sell it today you would earn a total of 505.00 from holding Civista Bancshares or generate 31.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Middlefield Banc vs. Civista Bancshares
Performance |
| Timeline |
| Middlefield Banc |
| Civista Bancshares |
Middlefield Banc and Civista Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Middlefield Banc and Civista Bancshares
The main advantage of trading using opposite Middlefield Banc and Civista Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Middlefield Banc position performs unexpectedly, Civista Bancshares 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 Civista Bancshares will offset losses from the drop in Civista Bancshares' long position.| Middlefield Banc vs. Home Federal Bancorp | Middlefield Banc vs. First Northwest Bancorp | Middlefield Banc vs. Lake Shore Bancorp | Middlefield Banc vs. Community West Bancshares |
| Civista Bancshares vs. Home Federal Bancorp | Civista Bancshares vs. First Financial Northwest | Civista Bancshares vs. First Northwest Bancorp | Civista Bancshares vs. First Capital |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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