Correlation Between Westbury Bancorp and Magyar Bancorp
Can any of the company-specific risk be diversified away by investing in both Westbury Bancorp and Magyar 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 Westbury Bancorp and Magyar Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westbury Bancorp and Magyar Bancorp, you can compare the effects of market volatilities on Westbury Bancorp and Magyar 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 Westbury Bancorp with a short position of Magyar Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westbury Bancorp and Magyar Bancorp.
Diversification Opportunities for Westbury Bancorp and Magyar Bancorp
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Westbury and Magyar is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Westbury Bancorp and Magyar Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magyar Bancorp and Westbury 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 Westbury Bancorp are associated (or correlated) with Magyar Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magyar Bancorp has no effect on the direction of Westbury Bancorp i.e., Westbury Bancorp and Magyar Bancorp go up and down completely randomly.
Pair Corralation between Westbury Bancorp and Magyar Bancorp
Given the investment horizon of 90 days Westbury Bancorp is expected to generate 0.32 times more return on investment than Magyar Bancorp. However, Westbury Bancorp is 3.16 times less risky than Magyar Bancorp. It trades about 0.15 of its potential returns per unit of risk. Magyar Bancorp is currently generating about 0.02 per unit of risk. If you would invest 2,755 in Westbury Bancorp on August 28, 2024 and sell it today you would earn a total of 85.00 from holding Westbury Bancorp or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 8.78% |
| Values | Daily Returns |
Westbury Bancorp vs. Magyar Bancorp
Performance |
| Timeline |
| Westbury Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Magyar Bancorp |
Westbury Bancorp and Magyar Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westbury Bancorp and Magyar Bancorp
The main advantage of trading using opposite Westbury Bancorp and Magyar Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westbury Bancorp position performs unexpectedly, Magyar 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 Magyar Bancorp will offset losses from the drop in Magyar Bancorp's long position.| Westbury Bancorp vs. Home Federal Bancorp | Westbury Bancorp vs. First Northwest Bancorp | Westbury Bancorp vs. First Community | Westbury Bancorp vs. Oak Valley Bancorp |
| Magyar Bancorp vs. Home Federal Bancorp | Magyar Bancorp vs. Community West Bancshares | Magyar Bancorp vs. First Financial Northwest | Magyar Bancorp vs. First Northwest 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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