Correlation Between First Bankers and Farmers Bank
Can any of the company-specific risk be diversified away by investing in both First Bankers and Farmers 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 First Bankers and Farmers Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Bankers Trustshares and The Farmers Bank, you can compare the effects of market volatilities on First Bankers and Farmers 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 First Bankers with a short position of Farmers Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bankers and Farmers Bank.
Diversification Opportunities for First Bankers and Farmers Bank
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Farmers is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding First Bankers Trustshares and The Farmers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Bank and First Bankers 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 First Bankers Trustshares are associated (or correlated) with Farmers Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Bank has no effect on the direction of First Bankers i.e., First Bankers and Farmers Bank go up and down completely randomly.
Pair Corralation between First Bankers and Farmers Bank
Given the investment horizon of 90 days First Bankers Trustshares is expected to generate 2.11 times more return on investment than Farmers Bank. However, First Bankers is 2.11 times more volatile than The Farmers Bank. It trades about 0.17 of its potential returns per unit of risk. The Farmers Bank is currently generating about -0.23 per unit of risk. If you would invest 1,600 in First Bankers Trustshares on August 25, 2024 and sell it today you would earn a total of 85.00 from holding First Bankers Trustshares or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
First Bankers Trustshares vs. The Farmers Bank
Performance |
| Timeline |
| First Bankers Trustshares |
| Farmers Bank |
First Bankers and Farmers Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bankers and Farmers Bank
The main advantage of trading using opposite First Bankers and Farmers Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bankers position performs unexpectedly, Farmers 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 Farmers Bank will offset losses from the drop in Farmers Bank's long position.| First Bankers vs. Greenville Federal Financial | First Bankers vs. First Ottawa Bancshares | First Bankers vs. Coastal Carolina Bancshares | First Bankers vs. Citizens Bancorp Investment |
| Farmers Bank vs. CIB Marine Bancshares | Farmers Bank vs. F M Bank | Farmers Bank vs. ENB Financial Corp | Farmers Bank vs. First Bankers Trustshares |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |