Correlation Between MNB Holdings and PSB Holdings
Can any of the company-specific risk be diversified away by investing in both MNB Holdings and PSB Holdings 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 PSB Holdings 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 PSB Holdings, you can compare the effects of market volatilities on MNB Holdings and PSB Holdings 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 PSB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MNB Holdings and PSB Holdings.
Diversification Opportunities for MNB Holdings and PSB Holdings
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between MNB and PSB is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding MNB Holdings Corp and PSB Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSB Holdings 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 PSB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSB Holdings has no effect on the direction of MNB Holdings i.e., MNB Holdings and PSB Holdings go up and down completely randomly.
Pair Corralation between MNB Holdings and PSB Holdings
Given the investment horizon of 90 days MNB Holdings Corp is expected to under-perform the PSB Holdings. But the otc stock apears to be less risky and, when comparing its historical volatility, MNB Holdings Corp is 1.19 times less risky than PSB Holdings. The otc stock trades about -0.15 of its potential returns per unit of risk. The PSB Holdings is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,600 in PSB Holdings on August 30, 2024 and sell it today you would earn a total of 190.00 from holding PSB Holdings or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MNB Holdings Corp vs. PSB Holdings
Performance |
| Timeline |
| MNB Holdings Corp |
| PSB Holdings |
MNB Holdings and PSB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MNB Holdings and PSB Holdings
The main advantage of trading using opposite MNB Holdings and PSB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MNB Holdings position performs unexpectedly, PSB Holdings 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 PSB Holdings will offset losses from the drop in PSB Holdings' long position.| MNB Holdings vs. Harbor Bankshares | MNB Holdings vs. Oconee Financial | MNB Holdings vs. Mission Valley Bancorp | MNB Holdings vs. MF Bancorp |
| PSB Holdings vs. Invesco High Income | PSB Holdings vs. Blackrock Muniholdings Ny | PSB Holdings vs. Nuveen California Select | PSB Holdings vs. MFS Investment Grade |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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