Correlation Between Westbury Bancorp and Mullen Group
Can any of the company-specific risk be diversified away by investing in both Westbury Bancorp and Mullen Group 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 Mullen Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westbury Bancorp and Mullen Group, you can compare the effects of market volatilities on Westbury Bancorp and Mullen Group 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 Mullen Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westbury Bancorp and Mullen Group.
Diversification Opportunities for Westbury Bancorp and Mullen Group
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westbury and Mullen is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Westbury Bancorp and Mullen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Group 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 Mullen Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mullen Group has no effect on the direction of Westbury Bancorp i.e., Westbury Bancorp and Mullen Group go up and down completely randomly.
Pair Corralation between Westbury Bancorp and Mullen Group
Given the investment horizon of 90 days Westbury Bancorp is expected to generate 1.54 times less return on investment than Mullen Group. But when comparing it to its historical volatility, Westbury Bancorp is 7.67 times less risky than Mullen Group. It trades about 0.12 of its potential returns per unit of risk. Mullen Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,020 in Mullen Group on September 2, 2024 and sell it today you would earn a total of 75.00 from holding Mullen Group or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 11.36% |
| Values | Daily Returns |
Westbury Bancorp vs. Mullen Group
Performance |
| Timeline |
| Westbury Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Mullen Group |
Westbury Bancorp and Mullen Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westbury Bancorp and Mullen Group
The main advantage of trading using opposite Westbury Bancorp and Mullen Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westbury Bancorp position performs unexpectedly, Mullen Group 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 Mullen Group will offset losses from the drop in Mullen Group'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 |
| Mullen Group vs. ArcBest Corp | Mullen Group vs. Old Dominion Freight | Mullen Group vs. Saia Inc | Mullen Group vs. XPO Logistics |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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