Correlation Between MNB Holdings and Finward Bancorp
Can any of the company-specific risk be diversified away by investing in both MNB Holdings and Finward 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 Finward 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 Finward Bancorp, you can compare the effects of market volatilities on MNB Holdings and Finward 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 Finward Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MNB Holdings and Finward Bancorp.
Diversification Opportunities for MNB Holdings and Finward Bancorp
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between MNB and Finward is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding MNB Holdings Corp and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward 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 Finward Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finward Bancorp has no effect on the direction of MNB Holdings i.e., MNB Holdings and Finward Bancorp go up and down completely randomly.
Pair Corralation between MNB Holdings and Finward Bancorp
Given the investment horizon of 90 days MNB Holdings Corp is expected to under-perform the Finward Bancorp. In addition to that, MNB Holdings is 1.69 times more volatile than Finward Bancorp. It trades about -0.01 of its total potential returns per unit of risk. Finward Bancorp is currently generating about 0.13 per unit of volatility. If you would invest 2,122 in Finward Bancorp on September 3, 2024 and sell it today you would earn a total of 1,016 from holding Finward Bancorp or generate 47.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MNB Holdings Corp vs. Finward Bancorp
Performance |
| Timeline |
| MNB Holdings Corp |
| Finward Bancorp |
MNB Holdings and Finward Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MNB Holdings and Finward Bancorp
The main advantage of trading using opposite MNB Holdings and Finward Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MNB Holdings position performs unexpectedly, Finward 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 Finward Bancorp will offset losses from the drop in Finward 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 |
| Finward Bancorp vs. Community West Bancshares | Finward Bancorp vs. First Financial Northwest | Finward Bancorp vs. Oak Valley Bancorp | Finward Bancorp vs. Home Federal Bancorp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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