Correlation Between Farmers Bank and FNB
Can any of the company-specific risk be diversified away by investing in both Farmers Bank and FNB 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 FNB 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 FNB Inc, you can compare the effects of market volatilities on Farmers Bank and FNB 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 FNB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Bank and FNB.
Diversification Opportunities for Farmers Bank and FNB
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Farmers and FNB is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Farmers Bank and FNB Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB Inc 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 FNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB Inc has no effect on the direction of Farmers Bank i.e., Farmers Bank and FNB go up and down completely randomly.
Pair Corralation between Farmers Bank and FNB
Given the investment horizon of 90 days The Farmers Bank is expected to under-perform the FNB. But the otc stock apears to be less risky and, when comparing its historical volatility, The Farmers Bank is 2.11 times less risky than FNB. The otc stock trades about 0.0 of its potential returns per unit of risk. The FNB Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,500 in FNB Inc on August 29, 2024 and sell it today you would earn a total of 0.00 from holding FNB Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.84% |
| Values | Daily Returns |
The Farmers Bank vs. FNB Inc
Performance |
| Timeline |
| Farmers Bank |
| FNB Inc |
Farmers Bank and FNB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Bank and FNB
The main advantage of trading using opposite Farmers Bank and FNB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Bank position performs unexpectedly, FNB 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 FNB will offset losses from the drop in FNB'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 |
| FNB vs. Century Financial Corp | FNB vs. Apollo Bancorp | FNB vs. Commercial National Financial | FNB vs. Eastern Michigan Financial |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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