Correlation Between Muncy Bank and MBT Bancshares
Can any of the company-specific risk be diversified away by investing in both Muncy Bank and MBT Bancshares 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 Muncy Bank and MBT Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Muncy Bank Financial and MBT Bancshares, you can compare the effects of market volatilities on Muncy Bank and MBT Bancshares 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 Muncy Bank with a short position of MBT Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muncy Bank and MBT Bancshares.
Diversification Opportunities for Muncy Bank and MBT Bancshares
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Muncy and MBT is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Muncy Bank Financial and MBT Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBT Bancshares and Muncy 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 Muncy Bank Financial are associated (or correlated) with MBT Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBT Bancshares has no effect on the direction of Muncy Bank i.e., Muncy Bank and MBT Bancshares go up and down completely randomly.
Pair Corralation between Muncy Bank and MBT Bancshares
If you would invest 1,875 in MBT Bancshares on August 25, 2024 and sell it today you would earn a total of 75.00 from holding MBT Bancshares or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 2.22% |
| Values | Daily Returns |
Muncy Bank Financial vs. MBT Bancshares
Performance |
| Timeline |
| Muncy Bank Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MBT Bancshares |
Muncy Bank and MBT Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muncy Bank and MBT Bancshares
The main advantage of trading using opposite Muncy Bank and MBT Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muncy Bank position performs unexpectedly, MBT Bancshares 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 MBT Bancshares will offset losses from the drop in MBT Bancshares' long position.| Muncy Bank vs. Main Street Financial | Muncy Bank vs. Susquehanna Community Financial | Muncy Bank vs. First Keystone Corp | Muncy Bank vs. Mifflinburg Bancorp |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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