Correlation Between MVB Financial and Dow Jones
Can any of the company-specific risk be diversified away by investing in both MVB Financial and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on MVB Financial and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of MVB Financial and Dow Jones.
Diversification Opportunities for MVB Financial and Dow Jones
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MVB and Dow is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding MVB Financial Corp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of MVB Financial i.e., MVB Financial and Dow Jones go up and down completely randomly.
Pair Corralation between MVB Financial and Dow Jones
Given the investment horizon of 90 days MVB Financial Corp is expected to generate 5.16 times more return on investment than Dow Jones. However, MVB Financial is 5.16 times more volatile than Dow Jones Industrial. It trades about 0.07 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of risk. If you would invest 2,029 in MVB Financial Corp on August 29, 2024 and sell it today you would earn a total of 122.00 from holding MVB Financial Corp or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MVB Financial Corp vs. Dow Jones Industrial
Performance |
| Timeline |
MVB Financial and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
MVB Financial Corp
Pair trading matchups for MVB Financial
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with MVB Financial and Dow Jones
The main advantage of trading using opposite MVB Financial and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MVB Financial position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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