Correlation Between Main Street and Oconee Federal
Can any of the company-specific risk be diversified away by investing in both Main Street and Oconee Federal 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 Main Street and Oconee Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Street Financial and Oconee Federal Financial, you can compare the effects of market volatilities on Main Street and Oconee Federal 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 Main Street with a short position of Oconee Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Street and Oconee Federal.
Diversification Opportunities for Main Street and Oconee Federal
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Main and Oconee is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Main Street Financial and Oconee Federal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oconee Federal Financial and Main Street 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 Main Street Financial are associated (or correlated) with Oconee Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oconee Federal Financial has no effect on the direction of Main Street i.e., Main Street and Oconee Federal go up and down completely randomly.
Pair Corralation between Main Street and Oconee Federal
Given the investment horizon of 90 days Main Street Financial is expected to generate 0.81 times more return on investment than Oconee Federal. However, Main Street Financial is 1.23 times less risky than Oconee Federal. It trades about 0.0 of its potential returns per unit of risk. Oconee Federal Financial is currently generating about -0.13 per unit of risk. If you would invest 1,651 in Main Street Financial on November 5, 2024 and sell it today you would lose (231.00) from holding Main Street Financial or give up 13.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 22.52% |
| Values | Daily Returns |
Main Street Financial vs. Oconee Federal Financial
Performance |
| Timeline |
| Main Street Financial |
| Oconee Federal Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Main Street and Oconee Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Street and Oconee Federal
The main advantage of trading using opposite Main Street and Oconee Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Street position performs unexpectedly, Oconee Federal 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 Oconee Federal will offset losses from the drop in Oconee Federal's long position.| Main Street vs. CCFNB Bancorp | Main Street vs. Burke Herbert Financial | Main Street vs. First IC | Main Street vs. Enterprise Financial Services |
| Oconee Federal vs. Home Federal Bancorp | Oconee Federal vs. Community West Bancshares | Oconee Federal vs. Magyar Bancorp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
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| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |