Correlation Between Magyar Bancorp and Macatawa Bank
Can any of the company-specific risk be diversified away by investing in both Magyar Bancorp and Macatawa Bank 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 Macatawa Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magyar Bancorp and Macatawa Bank, you can compare the effects of market volatilities on Magyar Bancorp and Macatawa Bank 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 Macatawa Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Bancorp and Macatawa Bank.
Diversification Opportunities for Magyar Bancorp and Macatawa Bank
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magyar and Macatawa is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Bancorp and Macatawa Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macatawa 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 Macatawa Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macatawa Bank has no effect on the direction of Magyar Bancorp i.e., Magyar Bancorp and Macatawa Bank go up and down completely randomly.
Pair Corralation between Magyar Bancorp and Macatawa Bank
If you would invest 1,232 in Magyar Bancorp on August 28, 2024 and sell it today you would earn a total of 93.00 from holding Magyar Bancorp or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Magyar Bancorp vs. Macatawa Bank
Performance |
| Timeline |
| Magyar Bancorp |
| Macatawa Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Magyar Bancorp and Macatawa Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Bancorp and Macatawa Bank
The main advantage of trading using opposite Magyar Bancorp and Macatawa Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Bancorp position performs unexpectedly, Macatawa Bank 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 Macatawa Bank will offset losses from the drop in Macatawa Bank'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 |
| Macatawa Bank vs. Home Federal Bancorp | Macatawa Bank vs. First Capital | Macatawa Bank vs. Magyar Bancorp | Macatawa Bank vs. Community West Bancshares |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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