Correlation Between MVB Financial and CF Bankshares
Can any of the company-specific risk be diversified away by investing in both MVB Financial and CF Bankshares 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 MVB Financial and CF Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MVB Financial Corp and CF Bankshares, you can compare the effects of market volatilities on MVB Financial and CF Bankshares 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 MVB Financial with a short position of CF Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of MVB Financial and CF Bankshares.
Diversification Opportunities for MVB Financial and CF Bankshares
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MVB and CFBK is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding MVB Financial Corp and CF Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Bankshares and MVB Financial 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 MVB Financial Corp are associated (or correlated) with CF Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Bankshares has no effect on the direction of MVB Financial i.e., MVB Financial and CF Bankshares go up and down completely randomly.
Pair Corralation between MVB Financial and CF Bankshares
Given the investment horizon of 90 days MVB Financial Corp is expected to generate 1.88 times more return on investment than CF Bankshares. However, MVB Financial is 1.88 times more volatile than CF Bankshares. It trades about 0.16 of its potential returns per unit of risk. CF Bankshares is currently generating about 0.17 per unit of risk. If you would invest 1,874 in MVB Financial Corp on September 4, 2024 and sell it today you would earn a total of 285.00 from holding MVB Financial Corp or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MVB Financial Corp vs. CF Bankshares
Performance |
| Timeline |
| MVB Financial Corp |
| CF Bankshares |
MVB Financial and CF Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MVB Financial and CF Bankshares
The main advantage of trading using opposite MVB Financial and CF Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MVB Financial position performs unexpectedly, CF Bankshares 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 CF Bankshares will offset losses from the drop in CF Bankshares' long position.| MVB Financial vs. Community West Bancshares | MVB Financial vs. First Financial Northwest | MVB Financial vs. CF Bankshares | MVB Financial vs. Home Federal Bancorp |
| CF Bankshares vs. International Bancshares | CF Bankshares vs. Finward Bancorp | CF Bankshares vs. Aquagold International | CF Bankshares vs. Thrivent High Yield |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |