Correlation Between Middlefield Banc and Orange County
Can any of the company-specific risk be diversified away by investing in both Middlefield Banc and Orange County 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 Orange County into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Middlefield Banc and Orange County Bancorp, you can compare the effects of market volatilities on Middlefield Banc and Orange County 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 Orange County. Check out your portfolio center. Please also check ongoing floating volatility patterns of Middlefield Banc and Orange County.
Diversification Opportunities for Middlefield Banc and Orange County
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Middlefield and Orange is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Middlefield Banc and Orange County Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange County 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 Orange County. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange County Bancorp has no effect on the direction of Middlefield Banc i.e., Middlefield Banc and Orange County go up and down completely randomly.
Pair Corralation between Middlefield Banc and Orange County
Given the investment horizon of 90 days Middlefield Banc is expected to generate 1.0 times more return on investment than Orange County. However, Middlefield Banc is 1.0 times less risky than Orange County. It trades about 0.07 of its potential returns per unit of risk. Orange County Bancorp is currently generating about 0.01 per unit of risk. If you would invest 2,766 in Middlefield Banc on August 29, 2024 and sell it today you would earn a total of 308.00 from holding Middlefield Banc or generate 11.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Middlefield Banc vs. Orange County Bancorp
Performance |
| Timeline |
| Middlefield Banc |
| Orange County Bancorp |
Middlefield Banc and Orange County Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Middlefield Banc and Orange County
The main advantage of trading using opposite Middlefield Banc and Orange County positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Middlefield Banc position performs unexpectedly, Orange County 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 Orange County will offset losses from the drop in Orange County's long position.| Middlefield Banc vs. Home Federal Bancorp | Middlefield Banc vs. First Northwest Bancorp | Middlefield Banc vs. First Financial Northwest | Middlefield Banc vs. First Capital |
| Orange County vs. Southern States Bancshares | Orange County vs. US Century Bank | Orange County vs. Third Coast Bancshares | Orange County vs. Esquire Financial Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Correlations Find global opportunities by holding instruments from different markets |