Correlation Between Mauch Chunk and MBT Bancshares
Can any of the company-specific risk be diversified away by investing in both Mauch Chunk and MBT 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 Mauch Chunk and MBT Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mauch Chunk Trust and MBT Bancshares, you can compare the effects of market volatilities on Mauch Chunk and MBT 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 Mauch Chunk with a short position of MBT Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mauch Chunk and MBT Bancshares.
Diversification Opportunities for Mauch Chunk and MBT Bancshares
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mauch and MBT is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Mauch Chunk Trust and MBT Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBT Bancshares and Mauch Chunk 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 Mauch Chunk Trust are associated (or correlated) with MBT Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBT Bancshares has no effect on the direction of Mauch Chunk i.e., Mauch Chunk and MBT Bancshares go up and down completely randomly.
Pair Corralation between Mauch Chunk and MBT Bancshares
Given the investment horizon of 90 days Mauch Chunk is expected to generate 6.73 times less return on investment than MBT Bancshares. In addition to that, Mauch Chunk is 3.65 times more volatile than MBT Bancshares. It trades about 0.01 of its total potential returns per unit of risk. MBT Bancshares is currently generating about 0.2 per unit of volatility. If you would invest 1,875 in MBT Bancshares on August 25, 2024 and sell it today you would earn a total of 75.00 from holding MBT Bancshares or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mauch Chunk Trust vs. MBT Bancshares
Performance |
| Timeline |
| Mauch Chunk Trust |
| MBT Bancshares |
Mauch Chunk and MBT Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mauch Chunk and MBT Bancshares
The main advantage of trading using opposite Mauch Chunk and MBT Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mauch Chunk position performs unexpectedly, MBT 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 MBT Bancshares will offset losses from the drop in MBT Bancshares' long position.| Mauch Chunk vs. Western Alliance Bancorporation | Mauch Chunk vs. Zions Bancorporation | Mauch Chunk vs. KeyCorp | Mauch Chunk vs. First Horizon National |
| MBT Bancshares vs. Invesco High Income | MBT Bancshares vs. Blackrock Muniholdings Ny | MBT Bancshares vs. MFS Investment Grade | MBT Bancshares vs. Federated Premier Municipal |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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