Correlation Between Mifflinburg Bancorp and First Keystone
Can any of the company-specific risk be diversified away by investing in both Mifflinburg Bancorp and First Keystone 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 First Keystone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mifflinburg Bancorp and First Keystone Corp, you can compare the effects of market volatilities on Mifflinburg Bancorp and First Keystone 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 First Keystone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mifflinburg Bancorp and First Keystone.
Diversification Opportunities for Mifflinburg Bancorp and First Keystone
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mifflinburg and First is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Mifflinburg Bancorp and First Keystone Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Keystone 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 First Keystone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Keystone Corp has no effect on the direction of Mifflinburg Bancorp i.e., Mifflinburg Bancorp and First Keystone go up and down completely randomly.
Pair Corralation between Mifflinburg Bancorp and First Keystone
Given the investment horizon of 90 days Mifflinburg Bancorp is expected to generate 1.02 times less return on investment than First Keystone. But when comparing it to its historical volatility, Mifflinburg Bancorp is 1.07 times less risky than First Keystone. It trades about 0.01 of its potential returns per unit of risk. First Keystone Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,563 in First Keystone Corp on August 29, 2024 and sell it today you would lose (44.00) from holding First Keystone Corp or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 52.58% |
| Values | Daily Returns |
Mifflinburg Bancorp vs. First Keystone Corp
Performance |
| Timeline |
| Mifflinburg Bancorp |
| First Keystone Corp |
Mifflinburg Bancorp and First Keystone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mifflinburg Bancorp and First Keystone
The main advantage of trading using opposite Mifflinburg Bancorp and First Keystone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mifflinburg Bancorp position performs unexpectedly, First Keystone 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 First Keystone will offset losses from the drop in First Keystone's long position.| Mifflinburg Bancorp vs. Mauch Chunk Trust | Mifflinburg Bancorp vs. Juniata Valley Financial | Mifflinburg Bancorp vs. MBT Bancshares |
| First Keystone vs. Citizens Bancorp Investment | First Keystone vs. Greenville Federal Financial | First Keystone vs. Oak Ridge Financial | First Keystone vs. Main Street Financial |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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