Correlation Between Mid Southern and First National
Can any of the company-specific risk be diversified away by investing in both Mid Southern and First National 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 Southern and First National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Southern Bancorp and First National Bank, you can compare the effects of market volatilities on Mid Southern and First National 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 Southern with a short position of First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Southern and First National.
Diversification Opportunities for Mid Southern and First National
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mid and First is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mid Southern Bancorp and First National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Bank and Mid Southern 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 Southern Bancorp are associated (or correlated) with First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Bank has no effect on the direction of Mid Southern i.e., Mid Southern and First National go up and down completely randomly.
Pair Corralation between Mid Southern and First National
If you would invest 17,894 in First National Bank on September 14, 2024 and sell it today you would earn a total of 5,106 from holding First National Bank or generate 28.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.37% |
| Values | Daily Returns |
Mid Southern Bancorp vs. First National Bank
Performance |
| Timeline |
| Mid Southern Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First National Bank |
Mid Southern and First National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Southern and First National
The main advantage of trading using opposite Mid Southern and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Southern position performs unexpectedly, First National 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 National will offset losses from the drop in First National's long position.| Mid Southern vs. Community West Bancshares | Mid Southern vs. First Financial Northwest | Mid Southern vs. CF Bankshares | Mid Southern vs. Home Federal Bancorp |
| First National vs. IF Bancorp | First National vs. LINKBANCORP | First National vs. Pathfinder Bancorp | First National vs. First Keystone Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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