Correlation Between Equity Bancshares, and Premier Financial
Can any of the company-specific risk be diversified away by investing in both Equity Bancshares, and Premier 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 Equity Bancshares, and Premier Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Bancshares, and Premier Financial Corp, you can compare the effects of market volatilities on Equity Bancshares, and Premier 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 Equity Bancshares, with a short position of Premier Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Bancshares, and Premier Financial.
Diversification Opportunities for Equity Bancshares, and Premier Financial
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Equity and Premier is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and Premier Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Financial Corp and Equity Bancshares, 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 Equity Bancshares, are associated (or correlated) with Premier Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Financial Corp has no effect on the direction of Equity Bancshares, i.e., Equity Bancshares, and Premier Financial go up and down completely randomly.
Pair Corralation between Equity Bancshares, and Premier Financial
Given the investment horizon of 90 days Equity Bancshares, is expected to generate 1.85 times less return on investment than Premier Financial. But when comparing it to its historical volatility, Equity Bancshares, is 1.18 times less risky than Premier Financial. It trades about 0.23 of its potential returns per unit of risk. Premier Financial Corp is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 2,445 in Premier Financial Corp on November 9, 2024 and sell it today you would earn a total of 385.00 from holding Premier Financial Corp or generate 15.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Bancshares, vs. Premier Financial Corp
Performance |
| Timeline |
| Equity Bancshares, |
| Premier Financial Corp |
Equity Bancshares, and Premier Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Bancshares, and Premier Financial
The main advantage of trading using opposite Equity Bancshares, and Premier Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Bancshares, position performs unexpectedly, Premier 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 Premier Financial will offset losses from the drop in Premier Financial's long position.| Equity Bancshares, vs. Brookline Bancorp | Equity Bancshares, vs. Kearny Financial Corp | Equity Bancshares, vs. Heritage Financial | Equity Bancshares, vs. FVCBankcorp |
| Premier Financial vs. Bankwell Financial Group | Premier Financial vs. Middlefield Banc | Premier Financial vs. Civista Bancshares | Premier Financial vs. Primis Financial Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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