Correlation Between Magyar Bancorp and Foreign Trade
Can any of the company-specific risk be diversified away by investing in both Magyar Bancorp and Foreign Trade 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 Foreign Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magyar Bancorp and Foreign Trade Bank, you can compare the effects of market volatilities on Magyar Bancorp and Foreign Trade 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 Foreign Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Bancorp and Foreign Trade.
Diversification Opportunities for Magyar Bancorp and Foreign Trade
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magyar and Foreign is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Bancorp and Foreign Trade Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Trade Bank 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 Foreign Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Trade Bank has no effect on the direction of Magyar Bancorp i.e., Magyar Bancorp and Foreign Trade go up and down completely randomly.
Pair Corralation between Magyar Bancorp and Foreign Trade
Given the investment horizon of 90 days Magyar Bancorp is expected to generate 1.61 times less return on investment than Foreign Trade. But when comparing it to its historical volatility, Magyar Bancorp is 1.03 times less risky than Foreign Trade. It trades about 0.07 of its potential returns per unit of risk. Foreign Trade Bank is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,904 in Foreign Trade Bank on August 31, 2024 and sell it today you would earn a total of 1,503 from holding Foreign Trade Bank or generate 78.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.66% |
| Values | Daily Returns |
Magyar Bancorp vs. Foreign Trade Bank
Performance |
| Timeline |
| Magyar Bancorp |
| Foreign Trade Bank |
Magyar Bancorp and Foreign Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Bancorp and Foreign Trade
The main advantage of trading using opposite Magyar Bancorp and Foreign Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Bancorp position performs unexpectedly, Foreign Trade 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 Foreign Trade will offset losses from the drop in Foreign Trade'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 |
| Foreign Trade vs. Banco Santander Chile | Foreign Trade vs. Bancolombia SA ADR | Foreign Trade vs. Banco Bradesco SA | Foreign Trade vs. Credicorp |
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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