Correlation Between Mauch Chunk and Juniata Valley

Can any of the company-specific risk be diversified away by investing in both Mauch Chunk and Juniata Valley 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 Mauch Chunk and Juniata Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mauch Chunk Trust and Juniata Valley Financial, you can compare the effects of market volatilities on Mauch Chunk and Juniata Valley 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 Mauch Chunk with a short position of Juniata Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mauch Chunk and Juniata Valley.

Diversification Opportunities for Mauch Chunk and Juniata Valley

0.41

Correlation Coefficient

Mauch Chunk  Juniata Valley

Very weak diversification

The 3 months correlation between Mauch and Juniata is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mauch Chunk Trust and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial and Mauch Chunk 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 Mauch Chunk Trust are associated (or correlated) with Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of Mauch Chunk i.e., Mauch Chunk and Juniata Valley go up and down completely randomly.

Pair Corralation between Mauch Chunk and Juniata Valley

Given the investment horizon of 90 days Mauch Chunk is expected to generate 92.87 times less return on investment than Juniata Valley. But when comparing it to its historical volatility, Mauch Chunk Trust is 2.28 times less risky than Juniata Valley. It trades about 0.0 of its potential returns per unit of risk. Juniata Valley Financial is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,206  in Juniata Valley Financial on December 1, 2024 and sell it today you would earn a total of  104.00  from holding Juniata Valley Financial or generate 8.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Mauch Chunk Trust  vs.  Juniata Valley Financial

Mauch Chunk Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mauch Chunk Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Mauch Chunk is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Juniata Valley Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Juniata Valley Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Juniata Valley is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mauch Chunk and Juniata Valley

The main advantage of trading using opposite Mauch Chunk and Juniata Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mauch Chunk position performs unexpectedly, Juniata Valley 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 Juniata Valley will offset losses from the drop in Juniata Valley's long position.

The idea behind Mauch Chunk Trust and Juniata Valley Financial 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.