Correlation Between Mauch Chunk and Mifflinburg Bancorp
Can any of the company-specific risk be diversified away by investing in both Mauch Chunk and Mifflinburg 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 Mauch Chunk and Mifflinburg Bancorp 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 Mifflinburg Bancorp, you can compare the effects of market volatilities on Mauch Chunk and Mifflinburg 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 Mauch Chunk with a short position of Mifflinburg Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mauch Chunk and Mifflinburg Bancorp.
Diversification Opportunities for Mauch Chunk and Mifflinburg Bancorp
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mauch and Mifflinburg is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mauch Chunk Trust and Mifflinburg Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mifflinburg Bancorp 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 Mifflinburg Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mifflinburg Bancorp has no effect on the direction of Mauch Chunk i.e., Mauch Chunk and Mifflinburg Bancorp go up and down completely randomly.
Pair Corralation between Mauch Chunk and Mifflinburg Bancorp
Given the investment horizon of 90 days Mauch Chunk Trust is expected to under-perform the Mifflinburg Bancorp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mauch Chunk Trust is 1.74 times less risky than Mifflinburg Bancorp. The pink sheet trades about -0.25 of its potential returns per unit of risk. The Mifflinburg Bancorp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,350 in Mifflinburg Bancorp on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Mifflinburg Bancorp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mauch Chunk Trust vs. Mifflinburg Bancorp
Performance |
| Timeline |
| Mauch Chunk Trust |
| Mifflinburg Bancorp |
Mauch Chunk and Mifflinburg Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mauch Chunk and Mifflinburg Bancorp
The main advantage of trading using opposite Mauch Chunk and Mifflinburg Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mauch Chunk position performs unexpectedly, Mifflinburg 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 Mifflinburg Bancorp will offset losses from the drop in Mifflinburg Bancorp's long position.The idea behind Mauch Chunk Trust and Mifflinburg Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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