Correlation Between Pacific West and MNB Holdings
Can any of the company-specific risk be diversified away by investing in both Pacific West and MNB Holdings 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 Pacific West and MNB Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific West Bancorp and MNB Holdings Corp, you can compare the effects of market volatilities on Pacific West and MNB Holdings 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 Pacific West with a short position of MNB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific West and MNB Holdings.
Diversification Opportunities for Pacific West and MNB Holdings
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pacific and MNB is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Pacific West Bancorp and MNB Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MNB Holdings Corp and Pacific West 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 Pacific West Bancorp are associated (or correlated) with MNB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MNB Holdings Corp has no effect on the direction of Pacific West i.e., Pacific West and MNB Holdings go up and down completely randomly.
Pair Corralation between Pacific West and MNB Holdings
If you would invest 2,500 in MNB Holdings Corp on October 11, 2024 and sell it today you would earn a total of 0.00 from holding MNB Holdings Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific West Bancorp vs. MNB Holdings Corp
Performance |
| Timeline |
| Pacific West Bancorp |
| MNB Holdings Corp |
Pacific West and MNB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific West and MNB Holdings
The main advantage of trading using opposite Pacific West and MNB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific West position performs unexpectedly, MNB Holdings 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 MNB Holdings will offset losses from the drop in MNB Holdings' long position.| Pacific West vs. XCPCNL Business Services | Pacific West vs. International Consolidated Companies | Pacific West vs. Mills Music Trust | Pacific West vs. Citrine Global Corp |
| MNB Holdings vs. Harbor Bankshares | MNB Holdings vs. Oconee Financial | MNB Holdings vs. Mission Valley Bancorp | MNB Holdings vs. Merchants Marine 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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