Correlation Between Macatawa Bank and MidWestOne Financial
Can any of the company-specific risk be diversified away by investing in both Macatawa Bank and MidWestOne Financial 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 Macatawa Bank and MidWestOne Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macatawa Bank and MidWestOne Financial Group, you can compare the effects of market volatilities on Macatawa Bank and MidWestOne Financial 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 Macatawa Bank with a short position of MidWestOne Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macatawa Bank and MidWestOne Financial.
Diversification Opportunities for Macatawa Bank and MidWestOne Financial
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Macatawa and MidWestOne is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Macatawa Bank and MidWestOne Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MidWestOne Financial and Macatawa Bank 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 Macatawa Bank are associated (or correlated) with MidWestOne Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MidWestOne Financial has no effect on the direction of Macatawa Bank i.e., Macatawa Bank and MidWestOne Financial go up and down completely randomly.
Pair Corralation between Macatawa Bank and MidWestOne Financial
If you would invest 2,879 in MidWestOne Financial Group on November 2, 2024 and sell it today you would earn a total of 281.00 from holding MidWestOne Financial Group or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Macatawa Bank vs. MidWestOne Financial Group
Performance |
| Timeline |
| Macatawa Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MidWestOne Financial |
Macatawa Bank and MidWestOne Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macatawa Bank and MidWestOne Financial
The main advantage of trading using opposite Macatawa Bank and MidWestOne Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macatawa Bank position performs unexpectedly, MidWestOne Financial 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 MidWestOne Financial will offset losses from the drop in MidWestOne Financial's long position.| Macatawa Bank vs. Home Federal Bancorp | Macatawa Bank vs. First Capital | Macatawa Bank vs. Magyar Bancorp | Macatawa Bank vs. Community West Bancshares |
| MidWestOne Financial vs. Home Federal Bancorp | MidWestOne Financial vs. Lake Shore Bancorp | MidWestOne Financial vs. Community West Bancshares | MidWestOne Financial vs. First Northwest Bancorp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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