Correlation Between Farmers Merchants and Crazy Woman
Can any of the company-specific risk be diversified away by investing in both Farmers Merchants and Crazy Woman 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 Merchants and Crazy Woman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmers Merchants Bancorp and Crazy Woman Creek, you can compare the effects of market volatilities on Farmers Merchants and Crazy Woman 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 Merchants with a short position of Crazy Woman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Merchants and Crazy Woman.
Diversification Opportunities for Farmers Merchants and Crazy Woman
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farmers and Crazy is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Merchants Bancorp and Crazy Woman Creek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crazy Woman Creek and Farmers Merchants 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 Farmers Merchants Bancorp are associated (or correlated) with Crazy Woman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crazy Woman Creek has no effect on the direction of Farmers Merchants i.e., Farmers Merchants and Crazy Woman go up and down completely randomly.
Pair Corralation between Farmers Merchants and Crazy Woman
If you would invest 2,755 in Farmers Merchants Bancorp on September 2, 2024 and sell it today you would earn a total of 597.00 from holding Farmers Merchants Bancorp or generate 21.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Farmers Merchants Bancorp vs. Crazy Woman Creek
Performance |
| Timeline |
| Farmers Merchants Bancorp |
| Crazy Woman Creek |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Farmers Merchants and Crazy Woman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Merchants and Crazy Woman
The main advantage of trading using opposite Farmers Merchants and Crazy Woman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Merchants position performs unexpectedly, Crazy Woman 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 Crazy Woman will offset losses from the drop in Crazy Woman's long position.| Farmers Merchants vs. Home Federal Bancorp | Farmers Merchants vs. First Financial Northwest | Farmers Merchants vs. First Northwest Bancorp | Farmers Merchants vs. First Capital |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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