Correlation Between MF Bancorp and Crazy Woman

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

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

Diversification Opportunities for MF Bancorp and Crazy Woman

0.0

Correlation Coefficient

MF Bancorp  Crazy Woman

Pay attention - limited upside

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

Pair Corralation between MF Bancorp and Crazy Woman

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

MF Bancorp  vs.  Crazy Woman Creek

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.

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.

Pair Trading with MF Bancorp and Crazy Woman

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

The idea behind MF Bancorp and Crazy Woman Creek 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.