Correlation Between MT Bank and BCB Bancorp
Can any of the company-specific risk be diversified away by investing in both MT Bank and BCB Bancorp 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 MT Bank and BCB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MT Bank and BCB Bancorp, you can compare the effects of market volatilities on MT Bank and BCB Bancorp 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 MT Bank with a short position of BCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT Bank and BCB Bancorp.
Diversification Opportunities for MT Bank and BCB Bancorp
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MTB and BCB is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp and MT Bank 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 MT Bank are associated (or correlated) with BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of MT Bank i.e., MT Bank and BCB Bancorp go up and down completely randomly.
Pair Corralation between MT Bank and BCB Bancorp
Considering the 90-day investment horizon MT Bank is expected to under-perform the BCB Bancorp. In addition to that, MT Bank is 1.18 times more volatile than BCB Bancorp. It trades about -0.25 of its total potential returns per unit of risk. BCB Bancorp is currently generating about -0.16 per unit of volatility. If you would invest 1,059 in BCB Bancorp on January 5, 2025 and sell it today you would lose (123.00) from holding BCB Bancorp or give up 11.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MT Bank vs. BCB Bancorp
Performance |
| Timeline |
| MT Bank |
| BCB Bancorp |
MT Bank and BCB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MT Bank and BCB Bancorp
The main advantage of trading using opposite MT Bank and BCB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank position performs unexpectedly, BCB Bancorp 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 BCB Bancorp will offset losses from the drop in BCB Bancorp's long position.| MT Bank vs. US Bancorp | MT Bank vs. Truist Financial Corp | MT Bank vs. Fifth Third Bancorp | MT Bank vs. KeyCorp |
| BCB Bancorp vs. Provident Financial Services | BCB Bancorp vs. First Mid Illinois | BCB Bancorp vs. ConnectOne Bancorp | BCB Bancorp vs. Finward 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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