Correlation Between Mifflinburg Bancorp and Century Financial
Can any of the company-specific risk be diversified away by investing in both Mifflinburg Bancorp and Century Financial 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 Century Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mifflinburg Bancorp and Century Financial Corp, you can compare the effects of market volatilities on Mifflinburg Bancorp and Century Financial 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 Century Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mifflinburg Bancorp and Century Financial.
Diversification Opportunities for Mifflinburg Bancorp and Century Financial
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mifflinburg and Century is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Mifflinburg Bancorp and Century Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Financial Corp 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 Century Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Financial Corp has no effect on the direction of Mifflinburg Bancorp i.e., Mifflinburg Bancorp and Century Financial go up and down completely randomly.
Pair Corralation between Mifflinburg Bancorp and Century Financial
Given the investment horizon of 90 days Mifflinburg Bancorp is expected to generate 11.63 times less return on investment than Century Financial. In addition to that, Mifflinburg Bancorp is 2.12 times more volatile than Century Financial Corp. It trades about 0.01 of its total potential returns per unit of risk. Century Financial Corp is currently generating about 0.16 per unit of volatility. If you would invest 2,449 in Century Financial Corp on September 1, 2024 and sell it today you would earn a total of 1,301 from holding Century Financial Corp or generate 53.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.78% |
| Values | Daily Returns |
Mifflinburg Bancorp vs. Century Financial Corp
Performance |
| Timeline |
| Mifflinburg Bancorp |
| Century Financial Corp |
Mifflinburg Bancorp and Century Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mifflinburg Bancorp and Century Financial
The main advantage of trading using opposite Mifflinburg Bancorp and Century Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mifflinburg Bancorp position performs unexpectedly, Century Financial 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 Century Financial will offset losses from the drop in Century Financial's long position.| Mifflinburg Bancorp vs. Mauch Chunk Trust | Mifflinburg Bancorp vs. Juniata Valley Financial | Mifflinburg Bancorp vs. MBT Bancshares |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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