Correlation Between Mifflinburg Bancorp and Farmers Bank
Can any of the company-specific risk be diversified away by investing in both Mifflinburg Bancorp and Farmers 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 Mifflinburg Bancorp and Farmers Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mifflinburg Bancorp and The Farmers Bank, you can compare the effects of market volatilities on Mifflinburg Bancorp and Farmers 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 Mifflinburg Bancorp with a short position of Farmers Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mifflinburg Bancorp and Farmers Bank.
Diversification Opportunities for Mifflinburg Bancorp and Farmers Bank
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mifflinburg and Farmers is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Mifflinburg Bancorp and The Farmers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Bank 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 Farmers Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Bank has no effect on the direction of Mifflinburg Bancorp i.e., Mifflinburg Bancorp and Farmers Bank go up and down completely randomly.
Pair Corralation between Mifflinburg Bancorp and Farmers Bank
Given the investment horizon of 90 days Mifflinburg Bancorp is expected to generate 1.78 times more return on investment than Farmers Bank. However, Mifflinburg Bancorp is 1.78 times more volatile than The Farmers Bank. It trades about 0.01 of its potential returns per unit of risk. The Farmers Bank is currently generating about 0.0 per unit of risk. If you would invest 2,691 in Mifflinburg Bancorp on August 29, 2024 and sell it today you would lose (341.00) from holding Mifflinburg Bancorp or give up 12.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.79% |
| Values | Daily Returns |
Mifflinburg Bancorp vs. The Farmers Bank
Performance |
| Timeline |
| Mifflinburg Bancorp |
| Farmers Bank |
Mifflinburg Bancorp and Farmers Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mifflinburg Bancorp and Farmers Bank
The main advantage of trading using opposite Mifflinburg Bancorp and Farmers Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mifflinburg Bancorp position performs unexpectedly, Farmers 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 Farmers Bank will offset losses from the drop in Farmers Bank'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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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