Correlation Between MidWestOne Financial and Central Pacific
Can any of the company-specific risk be diversified away by investing in both MidWestOne Financial and Central Pacific 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 MidWestOne Financial and Central Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MidWestOne Financial Group and Central Pacific Financial, you can compare the effects of market volatilities on MidWestOne Financial and Central Pacific 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 MidWestOne Financial with a short position of Central Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidWestOne Financial and Central Pacific.
Diversification Opportunities for MidWestOne Financial and Central Pacific
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between MidWestOne and Central is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding MidWestOne Financial Group and Central Pacific Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Pacific Financial and MidWestOne 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 MidWestOne Financial Group are associated (or correlated) with Central Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Pacific Financial has no effect on the direction of MidWestOne Financial i.e., MidWestOne Financial and Central Pacific go up and down completely randomly.
Pair Corralation between MidWestOne Financial and Central Pacific
Given the investment horizon of 90 days MidWestOne Financial Group is expected to generate 2.9 times more return on investment than Central Pacific. However, MidWestOne Financial is 2.9 times more volatile than Central Pacific Financial. It trades about 0.11 of its potential returns per unit of risk. Central Pacific Financial is currently generating about 0.04 per unit of risk. If you would invest 2,907 in MidWestOne Financial Group on August 14, 2025 and sell it today you would earn a total of 1,023 from holding MidWestOne Financial Group or generate 35.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MidWestOne Financial Group vs. Central Pacific Financial
Performance |
| Timeline |
| MidWestOne Financial |
| Central Pacific Financial |
MidWestOne Financial and Central Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidWestOne Financial and Central Pacific
The main advantage of trading using opposite MidWestOne Financial and Central Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidWestOne Financial position performs unexpectedly, Central Pacific 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 Central Pacific will offset losses from the drop in Central Pacific's long position.| MidWestOne Financial vs. Central Pacific Financial | MidWestOne Financial vs. Capitol Federal Financial | MidWestOne Financial vs. Hanmi Financial | MidWestOne Financial vs. Hbt Financial |
| Central Pacific vs. MidWestOne Financial Group | Central Pacific vs. Hanmi Financial | Central Pacific vs. Capitol Federal Financial | Central Pacific vs. Heritage Financial |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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