Correlation Between Mars Bancorp and Muncy Bank

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Can any of the company-specific risk be diversified away by investing in both Mars Bancorp and Muncy 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 Mars Bancorp and Muncy Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mars Bancorp and Muncy Bank Financial, you can compare the effects of market volatilities on Mars Bancorp and Muncy 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 Mars Bancorp with a short position of Muncy Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mars Bancorp and Muncy Bank.

Diversification Opportunities for Mars Bancorp and Muncy Bank

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Mars and Muncy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mars Bancorp and Muncy Bank Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muncy Bank Financial and Mars 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 Mars Bancorp are associated (or correlated) with Muncy Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muncy Bank Financial has no effect on the direction of Mars Bancorp i.e., Mars Bancorp and Muncy Bank go up and down completely randomly.

Pair Corralation between Mars Bancorp and Muncy Bank

If you would invest (100.00) in Muncy Bank Financial on November 8, 2024 and sell it today you would earn a total of  100.00  from holding Muncy Bank Financial or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Mars Bancorp  vs.  Muncy Bank Financial

 Performance 
       Timeline  
Mars Bancorp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Mars Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Mars Bancorp is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.
Muncy Bank Financial 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Muncy Bank Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Muncy Bank is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Mars Bancorp and Muncy Bank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mars Bancorp and Muncy Bank

The main advantage of trading using opposite Mars Bancorp and Muncy Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mars Bancorp position performs unexpectedly, Muncy 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 Muncy Bank will offset losses from the drop in Muncy Bank's long position.
The idea behind Mars Bancorp and Muncy Bank Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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