Correlation Between Midland States and Western New
Can any of the company-specific risk be diversified away by investing in both Midland States and Western New 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 Midland States and Western New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midland States Bancorp and Western New England, you can compare the effects of market volatilities on Midland States and Western New 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 Midland States with a short position of Western New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midland States and Western New.
Diversification Opportunities for Midland States and Western New
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Midland and Western is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Midland States Bancorp and Western New England in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western New England and Midland States 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 Midland States Bancorp are associated (or correlated) with Western New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western New England has no effect on the direction of Midland States i.e., Midland States and Western New go up and down completely randomly.
Pair Corralation between Midland States and Western New
Given the investment horizon of 90 days Midland States Bancorp is expected to generate 2.13 times more return on investment than Western New. However, Midland States is 2.13 times more volatile than Western New England. It trades about 0.14 of its potential returns per unit of risk. Western New England is currently generating about 0.26 per unit of risk. If you would invest 2,476 in Midland States Bancorp on August 31, 2024 and sell it today you would earn a total of 227.00 from holding Midland States Bancorp or generate 9.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Midland States Bancorp vs. Western New England
Performance |
| Timeline |
| Midland States Bancorp |
| Western New England |
Midland States and Western New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Midland States and Western New
The main advantage of trading using opposite Midland States and Western New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midland States position performs unexpectedly, Western New 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 Western New will offset losses from the drop in Western New's long position.| Midland States vs. MidWestOne Financial Group | Midland States vs. Equity Bancshares, | Midland States vs. First Mid Illinois | Midland States vs. ConnectOne Bancorp |
| Western New vs. KeyCorp | Western New vs. Comerica | Western New vs. First Horizon National | Western New vs. Western Alliance Bancorporation |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |