Correlation Between MBT Bancshares and Juniata Valley
Can any of the company-specific risk be diversified away by investing in both MBT Bancshares and Juniata Valley 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 MBT Bancshares and Juniata Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MBT Bancshares and Juniata Valley Financial, you can compare the effects of market volatilities on MBT Bancshares and Juniata Valley 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 MBT Bancshares with a short position of Juniata Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBT Bancshares and Juniata Valley.
Diversification Opportunities for MBT Bancshares and Juniata Valley
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between MBT and Juniata is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding MBT Bancshares and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial and MBT Bancshares 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 MBT Bancshares are associated (or correlated) with Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of MBT Bancshares i.e., MBT Bancshares and Juniata Valley go up and down completely randomly.
Pair Corralation between MBT Bancshares and Juniata Valley
Given the investment horizon of 90 days MBT Bancshares is expected to generate 4.01 times less return on investment than Juniata Valley. But when comparing it to its historical volatility, MBT Bancshares is 4.26 times less risky than Juniata Valley. It trades about 0.2 of its potential returns per unit of risk. Juniata Valley Financial is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,118 in Juniata Valley Financial on August 29, 2024 and sell it today you would earn a total of 182.00 from holding Juniata Valley Financial or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MBT Bancshares vs. Juniata Valley Financial
Performance |
| Timeline |
| MBT Bancshares |
| Juniata Valley Financial |
MBT Bancshares and Juniata Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBT Bancshares and Juniata Valley
The main advantage of trading using opposite MBT Bancshares and Juniata Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBT Bancshares position performs unexpectedly, Juniata Valley 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 Juniata Valley will offset losses from the drop in Juniata Valley's long position.| MBT Bancshares vs. Invesco High Income | MBT Bancshares vs. Blackrock Muniholdings Ny | MBT Bancshares vs. Nuveen California Select | MBT Bancshares vs. MFS Investment Grade |
| Juniata Valley vs. Invesco High Income | Juniata Valley vs. Blackrock Muniholdings Ny | Juniata Valley vs. Nuveen California Select | Juniata Valley vs. MFS Investment Grade |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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