Correlation Between Northfield Bancorp and Mifflinburg Bancorp
Can any of the company-specific risk be diversified away by investing in both Northfield Bancorp and Mifflinburg 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 Northfield Bancorp and Mifflinburg Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northfield Bancorp and Mifflinburg Bancorp, you can compare the effects of market volatilities on Northfield Bancorp and Mifflinburg 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 Northfield Bancorp with a short position of Mifflinburg Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northfield Bancorp and Mifflinburg Bancorp.
Diversification Opportunities for Northfield Bancorp and Mifflinburg Bancorp
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Northfield and Mifflinburg is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Northfield Bancorp and Mifflinburg Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mifflinburg Bancorp and Northfield Bancorp 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 Northfield Bancorp are associated (or correlated) with Mifflinburg Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mifflinburg Bancorp has no effect on the direction of Northfield Bancorp i.e., Northfield Bancorp and Mifflinburg Bancorp go up and down completely randomly.
Pair Corralation between Northfield Bancorp and Mifflinburg Bancorp
Given the investment horizon of 90 days Northfield Bancorp is expected to generate 2.11 times more return on investment than Mifflinburg Bancorp. However, Northfield Bancorp is 2.11 times more volatile than Mifflinburg Bancorp. It trades about 0.18 of its potential returns per unit of risk. Mifflinburg Bancorp is currently generating about -0.12 per unit of risk. If you would invest 1,164 in Northfield Bancorp on September 1, 2024 and sell it today you would earn a total of 174.00 from holding Northfield Bancorp or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northfield Bancorp vs. Mifflinburg Bancorp
Performance |
| Timeline |
| Northfield Bancorp |
| Mifflinburg Bancorp |
Northfield Bancorp and Mifflinburg Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northfield Bancorp and Mifflinburg Bancorp
The main advantage of trading using opposite Northfield Bancorp and Mifflinburg Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northfield Bancorp position performs unexpectedly, Mifflinburg 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 Mifflinburg Bancorp will offset losses from the drop in Mifflinburg Bancorp's long position.| Northfield Bancorp vs. Finward Bancorp | Northfield Bancorp vs. Community West Bancshares | Northfield Bancorp vs. First Financial Northwest | Northfield Bancorp vs. Home Bancorp |
| Mifflinburg Bancorp vs. Mauch Chunk Trust | Mifflinburg Bancorp vs. Juniata Valley Financial | Mifflinburg Bancorp vs. MBT Bancshares |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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