Correlation Between Mid Penn and First Capital
Can any of the company-specific risk be diversified away by investing in both Mid Penn and First Capital 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 Mid Penn and First Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Penn Bancorp and First Capital, you can compare the effects of market volatilities on Mid Penn and First Capital 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 Mid Penn with a short position of First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Penn and First Capital.
Diversification Opportunities for Mid Penn and First Capital
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mid and First is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mid Penn Bancorp and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital and Mid Penn 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 Mid Penn Bancorp are associated (or correlated) with First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of Mid Penn i.e., Mid Penn and First Capital go up and down completely randomly.
Pair Corralation between Mid Penn and First Capital
Considering the 90-day investment horizon Mid Penn Bancorp is expected to generate 1.16 times more return on investment than First Capital. However, Mid Penn is 1.16 times more volatile than First Capital. It trades about 0.07 of its potential returns per unit of risk. First Capital is currently generating about -0.28 per unit of risk. If you would invest 3,205 in Mid Penn Bancorp on August 27, 2024 and sell it today you would earn a total of 81.00 from holding Mid Penn Bancorp or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Penn Bancorp vs. First Capital
Performance |
| Timeline |
| Mid Penn Bancorp |
| First Capital |
Mid Penn and First Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Penn and First Capital
The main advantage of trading using opposite Mid Penn and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Penn position performs unexpectedly, First Capital 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 First Capital will offset losses from the drop in First Capital's long position.| Mid Penn vs. Fifth Third Bancorp | Mid Penn vs. Zions Bancorporation | Mid Penn vs. Huntington Bancshares Incorporated | Mid Penn vs. Comerica |
| First Capital vs. Fifth Third Bancorp | First Capital vs. Zions Bancorporation | First Capital vs. Huntington Bancshares Incorporated | First Capital vs. Comerica |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |