Correlation Between MNB Holdings and Security Federal

Can any of the company-specific risk be diversified away by investing in both MNB Holdings and Security Federal 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 MNB Holdings and Security Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MNB Holdings Corp and Security Federal, you can compare the effects of market volatilities on MNB Holdings and Security Federal 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 MNB Holdings with a short position of Security Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of MNB Holdings and Security Federal.

Diversification Opportunities for MNB Holdings and Security Federal

0.0

Correlation Coefficient

MNB Holdings  Security Federal

Pay attention - limited upside

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

Pair Corralation between MNB Holdings and Security Federal

If you would invest  2,500  in MNB Holdings Corp on December 28, 2024 and sell it today you would earn a total of  361.00  from holding MNB Holdings Corp or generate 14.44% return on investment over 90 days.

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

MNB Holdings Corp  vs.  Security Federal

MNB Holdings Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MNB Holdings Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, MNB Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Security Federal

Risk-Adjusted Performance

OK

Over the last 90 days Security Federal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Security Federal is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MNB Holdings and Security Federal

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

The idea behind MNB Holdings Corp and Security Federal 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.