Correlation Between Magyar Bancorp and BancFirst
Can any of the company-specific risk be diversified away by investing in both Magyar Bancorp and BancFirst 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 Magyar Bancorp and BancFirst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magyar Bancorp and BancFirst, you can compare the effects of market volatilities on Magyar Bancorp and BancFirst 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 Magyar Bancorp with a short position of BancFirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Bancorp and BancFirst.
Diversification Opportunities for Magyar Bancorp and BancFirst
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Magyar and BancFirst is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Bancorp and BancFirst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BancFirst and Magyar Bancorp 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 Magyar Bancorp are associated (or correlated) with BancFirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BancFirst has no effect on the direction of Magyar Bancorp i.e., Magyar Bancorp and BancFirst go up and down completely randomly.
Pair Corralation between Magyar Bancorp and BancFirst
Given the investment horizon of 90 days Magyar Bancorp is expected to generate 1.04 times less return on investment than BancFirst. But when comparing it to its historical volatility, Magyar Bancorp is 1.26 times less risky than BancFirst. It trades about 0.07 of its potential returns per unit of risk. BancFirst is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,014 in BancFirst on August 31, 2024 and sell it today you would earn a total of 3,614 from holding BancFirst or generate 40.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.66% |
| Values | Daily Returns |
Magyar Bancorp vs. BancFirst
Performance |
| Timeline |
| Magyar Bancorp |
| BancFirst |
Magyar Bancorp and BancFirst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Bancorp and BancFirst
The main advantage of trading using opposite Magyar Bancorp and BancFirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Bancorp position performs unexpectedly, BancFirst 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 BancFirst will offset losses from the drop in BancFirst's long position.| Magyar Bancorp vs. Home Federal Bancorp | Magyar Bancorp vs. Community West Bancshares | Magyar Bancorp vs. First Financial Northwest | Magyar Bancorp vs. First Northwest Bancorp |
| BancFirst vs. Glacier Bancorp | BancFirst vs. BOK Financial | BancFirst vs. First Financial Bancorp | BancFirst vs. First 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Commodity Directory Find actively traded commodities issued by global exchanges |