Correlation Between Farmers Bank and PT Bank
Can any of the company-specific risk be diversified away by investing in both Farmers Bank and PT Bank 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 PT Bank 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 PT Bank Central, you can compare the effects of market volatilities on Farmers Bank and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Bank and PT Bank.
Diversification Opportunities for Farmers Bank and PT Bank
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farmers and PBCRF is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding The Farmers Bank and PT Bank Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Central 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Central has no effect on the direction of Farmers Bank i.e., Farmers Bank and PT Bank go up and down completely randomly.
Pair Corralation between Farmers Bank and PT Bank
Given the investment horizon of 90 days The Farmers Bank is expected to under-perform the PT Bank. But the otc stock apears to be less risky and, when comparing its historical volatility, The Farmers Bank is 1.6 times less risky than PT Bank. The otc stock trades about 0.0 of its potential returns per unit of risk. The PT Bank Central is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 55.00 in PT Bank Central on October 20, 2024 and sell it today you would earn a total of 1.00 from holding PT Bank Central or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.82% |
| Values | Daily Returns |
The Farmers Bank vs. PT Bank Central
Performance |
| Timeline |
| Farmers Bank |
| PT Bank Central |
Farmers Bank and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Bank and PT Bank
The main advantage of trading using opposite Farmers Bank and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Bank position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank'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 |
| PT Bank vs. The Farmers Bank | PT Bank vs. CCSB Financial Corp | PT Bank vs. Bank of Utica | PT Bank vs. Delhi Bank 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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