Correlation Between Magyar Bancorp and City Holding
Can any of the company-specific risk be diversified away by investing in both Magyar Bancorp and City Holding 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 City Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magyar Bancorp and City Holding, you can compare the effects of market volatilities on Magyar Bancorp and City Holding 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 City Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Bancorp and City Holding.
Diversification Opportunities for Magyar Bancorp and City Holding
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Magyar and City is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Bancorp and City Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Holding 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 City Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Holding has no effect on the direction of Magyar Bancorp i.e., Magyar Bancorp and City Holding go up and down completely randomly.
Pair Corralation between Magyar Bancorp and City Holding
Given the investment horizon of 90 days Magyar Bancorp is expected to generate 1.08 times less return on investment than City Holding. But when comparing it to its historical volatility, Magyar Bancorp is 1.31 times less risky than City Holding. It trades about 0.15 of its potential returns per unit of risk. City Holding is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 10,088 in City Holding on August 29, 2024 and sell it today you would earn a total of 3,124 from holding City Holding or generate 30.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Magyar Bancorp vs. City Holding
Performance |
| Timeline |
| Magyar Bancorp |
| City Holding |
Magyar Bancorp and City Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Bancorp and City Holding
The main advantage of trading using opposite Magyar Bancorp and City Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Bancorp position performs unexpectedly, City Holding 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 City Holding will offset losses from the drop in City Holding'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 |
| City Holding vs. Community West Bancshares | City Holding vs. Oak Valley Bancorp | City Holding vs. Home Federal Bancorp | City Holding vs. Magyar 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |