Correlation Between Middlefield Banc and Cincinnati Bancorp
Can any of the company-specific risk be diversified away by investing in both Middlefield Banc and Cincinnati 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 Middlefield Banc and Cincinnati Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Middlefield Banc and Cincinnati Bancorp, you can compare the effects of market volatilities on Middlefield Banc and Cincinnati 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 Middlefield Banc with a short position of Cincinnati Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Middlefield Banc and Cincinnati Bancorp.
Diversification Opportunities for Middlefield Banc and Cincinnati Bancorp
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Middlefield and Cincinnati is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Middlefield Banc and Cincinnati Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cincinnati Bancorp 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 Cincinnati Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cincinnati Bancorp has no effect on the direction of Middlefield Banc i.e., Middlefield Banc and Cincinnati Bancorp go up and down completely randomly.
Pair Corralation between Middlefield Banc and Cincinnati Bancorp
If you would invest 2,360 in Middlefield Banc on August 25, 2024 and sell it today you would earn a total of 812.00 from holding Middlefield Banc or generate 34.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.53% |
| Values | Daily Returns |
Middlefield Banc vs. Cincinnati Bancorp
Performance |
| Timeline |
| Middlefield Banc |
| Cincinnati Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Middlefield Banc and Cincinnati Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Middlefield Banc and Cincinnati Bancorp
The main advantage of trading using opposite Middlefield Banc and Cincinnati Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Middlefield Banc position performs unexpectedly, Cincinnati 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 Cincinnati Bancorp will offset losses from the drop in Cincinnati Bancorp's 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 |
| Cincinnati Bancorp vs. Middlefield Banc | Cincinnati Bancorp vs. CB Financial Services | Cincinnati Bancorp vs. Orange County Bancorp | Cincinnati Bancorp vs. Ames National |
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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