Correlation Between Mifflinburg Bancorp and Community West
Can any of the company-specific risk be diversified away by investing in both Mifflinburg Bancorp and Community West 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 Mifflinburg Bancorp and Community West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mifflinburg Bancorp and Community West Bancshares, you can compare the effects of market volatilities on Mifflinburg Bancorp and Community West 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 Mifflinburg Bancorp with a short position of Community West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mifflinburg Bancorp and Community West.
Diversification Opportunities for Mifflinburg Bancorp and Community West
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mifflinburg and Community is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mifflinburg Bancorp and Community West Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community West Bancshares and Mifflinburg 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 Mifflinburg Bancorp are associated (or correlated) with Community West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community West Bancshares has no effect on the direction of Mifflinburg Bancorp i.e., Mifflinburg Bancorp and Community West go up and down completely randomly.
Pair Corralation between Mifflinburg Bancorp and Community West
Given the investment horizon of 90 days Mifflinburg Bancorp is expected to generate 46.78 times less return on investment than Community West. In addition to that, Mifflinburg Bancorp is 1.0 times more volatile than Community West Bancshares. It trades about 0.01 of its total potential returns per unit of risk. Community West Bancshares is currently generating about 0.41 per unit of volatility. If you would invest 1,861 in Community West Bancshares on August 29, 2024 and sell it today you would earn a total of 345.00 from holding Community West Bancshares or generate 18.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mifflinburg Bancorp vs. Community West Bancshares
Performance |
| Timeline |
| Mifflinburg Bancorp |
| Community West Bancshares |
Mifflinburg Bancorp and Community West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mifflinburg Bancorp and Community West
The main advantage of trading using opposite Mifflinburg Bancorp and Community West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mifflinburg Bancorp position performs unexpectedly, Community West 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 Community West will offset losses from the drop in Community West's long position.| Mifflinburg Bancorp vs. Mauch Chunk Trust | Mifflinburg Bancorp vs. Juniata Valley Financial | Mifflinburg Bancorp vs. MBT 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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