Correlation Between Eastern Michigan and Sturgis Bancorp
Can any of the company-specific risk be diversified away by investing in both Eastern Michigan and Sturgis 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 Eastern Michigan and Sturgis Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Michigan Financial and Sturgis Bancorp, you can compare the effects of market volatilities on Eastern Michigan and Sturgis 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 Eastern Michigan with a short position of Sturgis Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Michigan and Sturgis Bancorp.
Diversification Opportunities for Eastern Michigan and Sturgis Bancorp
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastern and Sturgis is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Michigan Financial and Sturgis Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sturgis Bancorp and Eastern Michigan 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 Eastern Michigan Financial are associated (or correlated) with Sturgis Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sturgis Bancorp has no effect on the direction of Eastern Michigan i.e., Eastern Michigan and Sturgis Bancorp go up and down completely randomly.
Pair Corralation between Eastern Michigan and Sturgis Bancorp
If you would invest 3,450 in Eastern Michigan Financial on August 29, 2024 and sell it today you would earn a total of 75.00 from holding Eastern Michigan Financial or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Eastern Michigan Financial vs. Sturgis Bancorp
Performance |
| Timeline |
| Eastern Michigan Fin |
| Sturgis Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eastern Michigan and Sturgis Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Michigan and Sturgis Bancorp
The main advantage of trading using opposite Eastern Michigan and Sturgis Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Michigan position performs unexpectedly, Sturgis 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 Sturgis Bancorp will offset losses from the drop in Sturgis Bancorp's long position.| Eastern Michigan vs. Commercial National Financial | Eastern Michigan vs. Mifflinburg Bancorp | Eastern Michigan vs. Apollo Bancorp | Eastern Michigan vs. Community Bankers |
| Sturgis Bancorp vs. FS Bancorp | Sturgis Bancorp vs. Eastern Michigan Financial | Sturgis Bancorp vs. Grand River Commerce | Sturgis Bancorp vs. Bank of Botetourt |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |