Correlation Between Malaga Financial and Freedom Bank
Can any of the company-specific risk be diversified away by investing in both Malaga Financial and Freedom 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 Malaga Financial and Freedom Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malaga Financial and Freedom Bank of, you can compare the effects of market volatilities on Malaga Financial and Freedom 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 Malaga Financial with a short position of Freedom Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malaga Financial and Freedom Bank.
Diversification Opportunities for Malaga Financial and Freedom Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Malaga and Freedom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Malaga Financial and Freedom Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Bank and Malaga Financial 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 Malaga Financial are associated (or correlated) with Freedom Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Bank has no effect on the direction of Malaga Financial i.e., Malaga Financial and Freedom Bank go up and down completely randomly.
Pair Corralation between Malaga Financial and Freedom Bank
Given the investment horizon of 90 days Malaga Financial is expected to under-perform the Freedom Bank. In addition to that, Malaga Financial is 1.85 times more volatile than Freedom Bank of. It trades about -0.04 of its total potential returns per unit of risk. Freedom Bank of is currently generating about 0.11 per unit of volatility. If you would invest 1,035 in Freedom Bank of on November 27, 2024 and sell it today you would earn a total of 15.00 from holding Freedom Bank of or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malaga Financial vs. Freedom Bank of
Performance |
| Timeline |
| Malaga Financial |
| Freedom Bank |
Malaga Financial and Freedom Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malaga Financial and Freedom Bank
The main advantage of trading using opposite Malaga Financial and Freedom Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malaga Financial position performs unexpectedly, Freedom 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 Freedom Bank will offset losses from the drop in Freedom Bank's long position.| Malaga Financial vs. MF Bancorp | Malaga Financial vs. United Bancorporation of | Malaga Financial vs. Harbor Bankshares | Malaga Financial vs. BankFirst Capital |
| Freedom Bank vs. National Capital Bank | Freedom Bank vs. Community Heritage Financial | Freedom Bank vs. Citizens Financial Corp | Freedom Bank vs. Bank of Idaho |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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