Correlation Between Magyar Bancorp and Oakworth Capital
Can any of the company-specific risk be diversified away by investing in both Magyar Bancorp and Oakworth Capital 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 Oakworth Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magyar Bancorp and Oakworth Capital, you can compare the effects of market volatilities on Magyar Bancorp and Oakworth Capital 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 Oakworth Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magyar Bancorp and Oakworth Capital.
Diversification Opportunities for Magyar Bancorp and Oakworth Capital
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Magyar and Oakworth is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Magyar Bancorp and Oakworth Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakworth Capital 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 Oakworth Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakworth Capital has no effect on the direction of Magyar Bancorp i.e., Magyar Bancorp and Oakworth Capital go up and down completely randomly.
Pair Corralation between Magyar Bancorp and Oakworth Capital
Given the investment horizon of 90 days Magyar Bancorp is expected to generate 3.05 times more return on investment than Oakworth Capital. However, Magyar Bancorp is 3.05 times more volatile than Oakworth Capital. It trades about 0.55 of its potential returns per unit of risk. Oakworth Capital is currently generating about 0.47 per unit of risk. If you would invest 1,232 in Magyar Bancorp on August 30, 2024 and sell it today you would earn a total of 159.00 from holding Magyar Bancorp or generate 12.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magyar Bancorp vs. Oakworth Capital
Performance |
| Timeline |
| Magyar Bancorp |
| Oakworth Capital |
Magyar Bancorp and Oakworth Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magyar Bancorp and Oakworth Capital
The main advantage of trading using opposite Magyar Bancorp and Oakworth Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magyar Bancorp position performs unexpectedly, Oakworth Capital 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 Oakworth Capital will offset losses from the drop in Oakworth Capital'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 |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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