Correlation Between Bread Financial and MT Bank
Can any of the company-specific risk be diversified away by investing in both Bread Financial and MT 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 Bread Financial and MT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bread Financial Holdings and MT Bank, you can compare the effects of market volatilities on Bread Financial and MT 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 Bread Financial with a short position of MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bread Financial and MT Bank.
Diversification Opportunities for Bread Financial and MT Bank
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bread and MTB is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bread Financial Holdings and MT Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank and Bread Financial 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 Bread Financial Holdings are associated (or correlated) with MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank has no effect on the direction of Bread Financial i.e., Bread Financial and MT Bank go up and down completely randomly.
Pair Corralation between Bread Financial and MT Bank
Considering the 90-day investment horizon Bread Financial Holdings is expected to generate 1.69 times more return on investment than MT Bank. However, Bread Financial is 1.69 times more volatile than MT Bank. It trades about -0.01 of its potential returns per unit of risk. MT Bank is currently generating about -0.07 per unit of risk. If you would invest 6,086 in Bread Financial Holdings on July 20, 2025 and sell it today you would lose (183.00) from holding Bread Financial Holdings or give up 3.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bread Financial Holdings vs. MT Bank
Performance |
| Timeline |
| Bread Financial Holdings |
| MT Bank |
Bread Financial and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bread Financial and MT Bank
The main advantage of trading using opposite Bread Financial and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bread Financial position performs unexpectedly, MT 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 MT Bank will offset losses from the drop in MT Bank's long position.| Bread Financial vs. Enova International | Bread Financial vs. Western Union Co | Bread Financial vs. Sezzle Inc | Bread Financial vs. Eagle Point Credit |
| MT Bank vs. Fifth Third Bancorp | MT Bank vs. KB Financial Group | MT Bank vs. Truist Financial Corp | MT Bank vs. Banco Bradesco SA |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |