Correlation Between Exchange Bank and Farmers
Can any of the company-specific risk be diversified away by investing in both Exchange Bank and Farmers 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 Exchange Bank and Farmers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Bank and Farmers And Merchants, you can compare the effects of market volatilities on Exchange Bank and Farmers 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 Exchange Bank with a short position of Farmers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Bank and Farmers.
Diversification Opportunities for Exchange Bank and Farmers
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Exchange and Farmers is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Bank and Farmers And Merchants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers And Merchants and Exchange 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 Exchange Bank are associated (or correlated) with Farmers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers And Merchants has no effect on the direction of Exchange Bank i.e., Exchange Bank and Farmers go up and down completely randomly.
Pair Corralation between Exchange Bank and Farmers
Given the investment horizon of 90 days Exchange Bank is expected to generate 5.82 times less return on investment than Farmers. In addition to that, Exchange Bank is 2.82 times more volatile than Farmers And Merchants. It trades about 0.02 of its total potential returns per unit of risk. Farmers And Merchants is currently generating about 0.25 per unit of volatility. If you would invest 545,000 in Farmers And Merchants on August 28, 2024 and sell it today you would earn a total of 20,000 from holding Farmers And Merchants or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exchange Bank vs. Farmers And Merchants
Performance |
| Timeline |
| Exchange Bank |
| Farmers And Merchants |
Exchange Bank and Farmers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Bank and Farmers
The main advantage of trading using opposite Exchange Bank and Farmers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Bank position performs unexpectedly, Farmers 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 will offset losses from the drop in Farmers' long position.| Exchange Bank vs. Invesco High Income | Exchange Bank vs. Blackrock Muniholdings Ny | Exchange Bank vs. MFS Investment Grade | Exchange Bank vs. Federated Premier Municipal |
| Farmers vs. First National Bank | Farmers vs. Farmers Merchants Bancorp | Farmers vs. Exchange Bank | Farmers vs. First National of |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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