Correlation Between MW Investment and Summit Bank

Can any of the company-specific risk be diversified away by investing in both MW Investment and Summit Bank 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 MW Investment and Summit Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MW Investment Holding and Summit Bank Group, you can compare the effects of market volatilities on MW Investment and Summit Bank 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 MW Investment with a short position of Summit Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MW Investment and Summit Bank.

Diversification Opportunities for MW Investment and Summit Bank

0.0

Correlation Coefficient

MW Investment  Summit Bank

Pay attention - limited upside

The 3 months correlation between MEGH and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MW Investment Holding and Summit Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Bank Group and MW Investment 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 MW Investment Holding are associated (or correlated) with Summit Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Bank Group has no effect on the direction of MW Investment i.e., MW Investment and Summit Bank go up and down completely randomly.

Pair Corralation between MW Investment and Summit Bank

If you would invest  1,430  in Summit Bank Group on October 10, 2024 and sell it today you would lose (20.00) from holding Summit Bank Group or give up 1.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MW Investment Holding  vs.  Summit Bank Group

MW Investment Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MW Investment Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, MW Investment is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Summit Bank Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Summit Bank Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward-looking signals, Summit Bank displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MW Investment and Summit Bank

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

The idea behind MW Investment Holding and Summit Bank Group 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.