Correlation Between Farmers Bank and CIB Marine
Can any of the company-specific risk be diversified away by investing in both Farmers Bank and CIB Marine 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 Farmers Bank and CIB Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Farmers Bank and CIB Marine Bancshares, you can compare the effects of market volatilities on Farmers Bank and CIB Marine 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 Farmers Bank with a short position of CIB Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Bank and CIB Marine.
Diversification Opportunities for Farmers Bank and CIB Marine
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Farmers and CIB is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Farmers Bank and CIB Marine Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIB Marine Bancshares and Farmers 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 The Farmers Bank are associated (or correlated) with CIB Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIB Marine Bancshares has no effect on the direction of Farmers Bank i.e., Farmers Bank and CIB Marine go up and down completely randomly.
Pair Corralation between Farmers Bank and CIB Marine
Given the investment horizon of 90 days The Farmers Bank is expected to under-perform the CIB Marine. But the otc stock apears to be less risky and, when comparing its historical volatility, The Farmers Bank is 2.98 times less risky than CIB Marine. The otc stock trades about -0.23 of its potential returns per unit of risk. The CIB Marine Bancshares is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,825 in CIB Marine Bancshares on August 25, 2024 and sell it today you would lose (25.00) from holding CIB Marine Bancshares or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Farmers Bank vs. CIB Marine Bancshares
Performance |
| Timeline |
| Farmers Bank |
| CIB Marine Bancshares |
Farmers Bank and CIB Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Bank and CIB Marine
The main advantage of trading using opposite Farmers Bank and CIB Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Bank position performs unexpectedly, CIB Marine 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 CIB Marine will offset losses from the drop in CIB Marine's long position.| Farmers Bank vs. CIB Marine Bancshares | Farmers Bank vs. F M Bank | Farmers Bank vs. ENB Financial Corp | Farmers Bank vs. First Bankers Trustshares |
| CIB Marine vs. U I Financial | CIB Marine vs. Heartland Banccorp | CIB Marine vs. United Bancorporation of | CIB Marine vs. Harbor Bankshares |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |