Correlation Between MNB Holdings and Commencement Bancorp
Can any of the company-specific risk be diversified away by investing in both MNB Holdings and Commencement Bancorp 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 MNB Holdings and Commencement Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MNB Holdings Corp and Commencement Bancorp, you can compare the effects of market volatilities on MNB Holdings and Commencement Bancorp 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 MNB Holdings with a short position of Commencement Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MNB Holdings and Commencement Bancorp.
Diversification Opportunities for MNB Holdings and Commencement Bancorp
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MNB and Commencement is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MNB Holdings Corp and Commencement Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commencement Bancorp and MNB Holdings 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 MNB Holdings Corp are associated (or correlated) with Commencement Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commencement Bancorp has no effect on the direction of MNB Holdings i.e., MNB Holdings and Commencement Bancorp go up and down completely randomly.
Pair Corralation between MNB Holdings and Commencement Bancorp
Given the investment horizon of 90 days MNB Holdings Corp is expected to generate 1.19 times more return on investment than Commencement Bancorp. However, MNB Holdings is 1.19 times more volatile than Commencement Bancorp. It trades about 0.22 of its potential returns per unit of risk. Commencement Bancorp is currently generating about 0.1 per unit of risk. If you would invest 2,450 in MNB Holdings Corp on October 10, 2024 and sell it today you would earn a total of 50.00 from holding MNB Holdings Corp or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MNB Holdings Corp vs. Commencement Bancorp
Performance |
| Timeline |
| MNB Holdings Corp |
| Commencement Bancorp |
MNB Holdings and Commencement Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MNB Holdings and Commencement Bancorp
The main advantage of trading using opposite MNB Holdings and Commencement Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MNB Holdings position performs unexpectedly, Commencement Bancorp 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 Commencement Bancorp will offset losses from the drop in Commencement Bancorp's long position.| MNB Holdings vs. Harbor Bankshares | MNB Holdings vs. Oconee Financial | MNB Holdings vs. Mission Valley Bancorp | MNB Holdings vs. MF Bancorp |
| Commencement Bancorp vs. Summit Bank Group | Commencement Bancorp vs. Pacific West Bancorp | Commencement Bancorp vs. Savi Financial | Commencement Bancorp vs. MNB Holdings Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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