Correlation Between Aozora Bank and Farmers Bancorp
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and Farmers Bancorp 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 Aozora Bank and Farmers Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank and Farmers Bancorp, you can compare the effects of market volatilities on Aozora Bank and Farmers Bancorp 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 Aozora Bank with a short position of Farmers Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and Farmers Bancorp.
Diversification Opportunities for Aozora Bank and Farmers Bancorp
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aozora and Farmers is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank and Farmers Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Bancorp and Aozora Bank 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 Aozora Bank are associated (or correlated) with Farmers Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Bancorp has no effect on the direction of Aozora Bank i.e., Aozora Bank and Farmers Bancorp go up and down completely randomly.
Pair Corralation between Aozora Bank and Farmers Bancorp
If you would invest 3,300 in Farmers Bancorp on September 2, 2024 and sell it today you would earn a total of 250.00 from holding Farmers Bancorp or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Aozora Bank vs. Farmers Bancorp
Performance |
| Timeline |
| Aozora Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Farmers Bancorp |
Aozora Bank and Farmers Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and Farmers Bancorp
The main advantage of trading using opposite Aozora Bank and Farmers Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, Farmers Bancorp 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 Farmers Bancorp will offset losses from the drop in Farmers Bancorp's long position.| Aozora Bank vs. Ryman Hospitality Properties | Aozora Bank vs. Starbucks | Aozora Bank vs. Verra Mobility Corp | Aozora Bank vs. The Cheesecake Factory |
| Farmers Bancorp vs. First Farmers Financial | Farmers Bancorp vs. Farmers Merchants Bancorp | Farmers Bancorp vs. Lakeland Financial | Farmers Bancorp vs. Eagle Financial Services |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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