Correlation Between MidWestOne Financial and Macatawa Bank
Can any of the company-specific risk be diversified away by investing in both MidWestOne Financial and Macatawa 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 MidWestOne Financial and Macatawa Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MidWestOne Financial Group and Macatawa Bank, you can compare the effects of market volatilities on MidWestOne Financial and Macatawa 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 MidWestOne Financial with a short position of Macatawa Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidWestOne Financial and Macatawa Bank.
Diversification Opportunities for MidWestOne Financial and Macatawa Bank
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between MidWestOne and Macatawa is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding MidWestOne Financial Group and Macatawa Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macatawa Bank and MidWestOne 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 MidWestOne Financial Group are associated (or correlated) with Macatawa Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macatawa Bank has no effect on the direction of MidWestOne Financial i.e., MidWestOne Financial and Macatawa Bank go up and down completely randomly.
Pair Corralation between MidWestOne Financial and Macatawa Bank
If you would invest 2,879 in MidWestOne Financial Group on November 2, 2024 and sell it today you would earn a total of 281.00 from holding MidWestOne Financial Group or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
MidWestOne Financial Group vs. Macatawa Bank
Performance |
| Timeline |
| MidWestOne Financial |
| Macatawa Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MidWestOne Financial and Macatawa Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidWestOne Financial and Macatawa Bank
The main advantage of trading using opposite MidWestOne Financial and Macatawa Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidWestOne Financial position performs unexpectedly, Macatawa 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 Macatawa Bank will offset losses from the drop in Macatawa Bank's long position.| MidWestOne Financial vs. Home Federal Bancorp | MidWestOne Financial vs. Lake Shore Bancorp | MidWestOne Financial vs. Community West Bancshares | MidWestOne Financial vs. First Northwest Bancorp |
| Macatawa Bank vs. Home Federal Bancorp | Macatawa Bank vs. First Capital | Macatawa Bank vs. Magyar Bancorp | Macatawa Bank vs. Community West Bancshares |
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 Stocks Directory module to find actively traded stocks across global markets.
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