Correlation Between First Farmers and Logansport Financial
Can any of the company-specific risk be diversified away by investing in both First Farmers and Logansport Financial 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 Farmers and Logansport Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Farmers Financial and Logansport Financial Corp, you can compare the effects of market volatilities on First Farmers and Logansport Financial 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 Farmers with a short position of Logansport Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Farmers and Logansport Financial.
Diversification Opportunities for First Farmers and Logansport Financial
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Logansport is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding First Farmers Financial and Logansport Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logansport Financial Corp and First Farmers 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 Farmers Financial are associated (or correlated) with Logansport Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logansport Financial Corp has no effect on the direction of First Farmers i.e., First Farmers and Logansport Financial go up and down completely randomly.
Pair Corralation between First Farmers and Logansport Financial
If you would invest 6,300 in First Farmers Financial on September 2, 2024 and sell it today you would earn a total of 399.00 from holding First Farmers Financial or generate 6.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.36% |
| Values | Daily Returns |
First Farmers Financial vs. Logansport Financial Corp
Performance |
| Timeline |
| First Farmers Financial |
| Logansport Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Farmers and Logansport Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Farmers and Logansport Financial
The main advantage of trading using opposite First Farmers and Logansport Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Farmers position performs unexpectedly, Logansport Financial 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 Logansport Financial will offset losses from the drop in Logansport Financial's long position.| First Farmers vs. Farmers Bancorp | First Farmers vs. Farmers Merchants Bancorp | First Farmers vs. Lakeland Financial | First Farmers vs. FFW Corporation |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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