Correlation Between Magyar Bancorp and Heritage Commerce
Can any of the company-specific risk be diversified away by investing in both Magyar Bancorp and Heritage Commerce 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 Heritage Commerce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magyar Bancorp and Heritage Commerce Corp, you can compare the effects of market volatilities on Magyar Bancorp and Heritage Commerce 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 Heritage Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Bancorp and Heritage Commerce.
Diversification Opportunities for Magyar Bancorp and Heritage Commerce
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magyar and Heritage is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Bancorp and Heritage Commerce Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Commerce Corp 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 Heritage Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Commerce Corp has no effect on the direction of Magyar Bancorp i.e., Magyar Bancorp and Heritage Commerce go up and down completely randomly.
Pair Corralation between Magyar Bancorp and Heritage Commerce
Given the investment horizon of 90 days Magyar Bancorp is expected to generate 6.78 times less return on investment than Heritage Commerce. In addition to that, Magyar Bancorp is 1.19 times more volatile than Heritage Commerce Corp. It trades about 0.04 of its total potential returns per unit of risk. Heritage Commerce Corp is currently generating about 0.36 per unit of volatility. If you would invest 957.00 in Heritage Commerce Corp on November 28, 2024 and sell it today you would earn a total of 99.00 from holding Heritage Commerce Corp or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magyar Bancorp vs. Heritage Commerce Corp
Performance |
| Timeline |
| Magyar Bancorp |
| Heritage Commerce Corp |
Magyar Bancorp and Heritage Commerce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Bancorp and Heritage Commerce
The main advantage of trading using opposite Magyar Bancorp and Heritage Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Bancorp position performs unexpectedly, Heritage Commerce 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 Heritage Commerce will offset losses from the drop in Heritage Commerce'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 |
| Heritage Commerce vs. Home Federal Bancorp | Heritage Commerce vs. First Financial Northwest | Heritage Commerce vs. First Northwest Bancorp | Heritage Commerce vs. First Capital |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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