Correlation Between NYSE Composite and MF Bancorp
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and MF 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 NYSE Composite and MF Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and MF Bancorp, you can compare the effects of market volatilities on NYSE Composite and MF 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 NYSE Composite with a short position of MF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and MF Bancorp.
Diversification Opportunities for NYSE Composite and MF Bancorp
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and MFBP is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and MF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MF Bancorp and NYSE Composite 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 NYSE Composite are associated (or correlated) with MF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MF Bancorp has no effect on the direction of NYSE Composite i.e., NYSE Composite and MF Bancorp go up and down completely randomly.
Pair Corralation between NYSE Composite and MF Bancorp
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.28 times more return on investment than MF Bancorp. However, NYSE Composite is 3.52 times less risky than MF Bancorp. It trades about 0.08 of its potential returns per unit of risk. MF Bancorp is currently generating about 0.01 per unit of risk. If you would invest 1,529,105 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 491,877 from holding NYSE Composite or generate 32.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.97% |
| Values | Daily Returns |
NYSE Composite vs. MF Bancorp
Performance |
| Timeline |
NYSE Composite and MF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
MF Bancorp
Pair trading matchups for MF Bancorp
Pair Trading with NYSE Composite and MF Bancorp
The main advantage of trading using opposite NYSE Composite and MF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, MF 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 MF Bancorp will offset losses from the drop in MF Bancorp's long position.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| MF Bancorp vs. Citizens Bancshares Corp | MF Bancorp vs. Harbor Bankshares | MF Bancorp vs. United Bancorporation of | MF Bancorp vs. KS 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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