Correlation Between Esquire Financial and MidWestOne Financial
Can any of the company-specific risk be diversified away by investing in both Esquire Financial and MidWestOne Financial 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 Esquire Financial and MidWestOne Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esquire Financial Holdings and MidWestOne Financial Group, you can compare the effects of market volatilities on Esquire Financial and MidWestOne Financial 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 Esquire Financial with a short position of MidWestOne Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esquire Financial and MidWestOne Financial.
Diversification Opportunities for Esquire Financial and MidWestOne Financial
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Esquire and MidWestOne is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Esquire Financial Holdings and MidWestOne Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MidWestOne Financial and Esquire 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 Esquire Financial Holdings are associated (or correlated) with MidWestOne Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MidWestOne Financial has no effect on the direction of Esquire Financial i.e., Esquire Financial and MidWestOne Financial go up and down completely randomly.
Pair Corralation between Esquire Financial and MidWestOne Financial
Considering the 90-day investment horizon Esquire Financial is expected to generate 5.23 times less return on investment than MidWestOne Financial. But when comparing it to its historical volatility, Esquire Financial Holdings is 2.87 times less risky than MidWestOne Financial. It trades about 0.06 of its potential returns per unit of risk. MidWestOne Financial Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,982 in MidWestOne Financial Group on August 30, 2025 and sell it today you would earn a total of 1,021 from holding MidWestOne Financial Group or generate 34.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esquire Financial Holdings vs. MidWestOne Financial Group
Performance |
| Timeline |
| Esquire Financial |
| MidWestOne Financial |
Esquire Financial and MidWestOne Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esquire Financial and MidWestOne Financial
The main advantage of trading using opposite Esquire Financial and MidWestOne Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esquire Financial position performs unexpectedly, MidWestOne Financial 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 MidWestOne Financial will offset losses from the drop in MidWestOne Financial's long position.| Esquire Financial vs. T Mobile US, 5500 | Esquire Financial vs. Alliance Sports Group | Esquire Financial vs. Wireless Xcessories Group | Esquire Financial vs. Travel Leisure Co |
| MidWestOne Financial vs. Zhibao Technology Class | MidWestOne Financial vs. MGIC Investment Corp | MidWestOne Financial vs. Sunlands Technology Group | MidWestOne Financial vs. Compass Diversified Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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