Correlation Between Crazy Woman and MF Bancorp

Can any of the company-specific risk be diversified away by investing in both Crazy Woman 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 Crazy Woman and MF Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crazy Woman Creek and MF Bancorp, you can compare the effects of market volatilities on Crazy Woman 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 Crazy Woman with a short position of MF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crazy Woman and MF Bancorp.

Diversification Opportunities for Crazy Woman and MF Bancorp

0.0

Correlation Coefficient

Crazy Woman  MF Bancorp

Pay attention - limited upside

The 3 months correlation between Crazy and MFBP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Crazy Woman Creek and MF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MF Bancorp and Crazy Woman 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 Crazy Woman Creek 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 Crazy Woman i.e., Crazy Woman and MF Bancorp go up and down completely randomly.

Pair Corralation between Crazy Woman and MF Bancorp

If you would invest  1,894  in MF Bancorp on December 18, 2024 and sell it today you would lose (69.00) from holding MF Bancorp or give up 3.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Crazy Woman Creek  vs.  MF Bancorp

Crazy Woman Creek

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crazy Woman Creek has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Crazy Woman is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

MF Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days MF Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, MF Bancorp is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Crazy Woman and MF Bancorp

The main advantage of trading using opposite Crazy Woman and MF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crazy Woman 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.

The idea behind Crazy Woman Creek and MF Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.