Correlation Between Farmers Merchants and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both Farmers Merchants and Eagle 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 Farmers Merchants and Eagle Financial 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 Eagle Financial Services, you can compare the effects of market volatilities on Farmers Merchants and Eagle 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 Farmers Merchants with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Merchants and Eagle Financial.
Diversification Opportunities for Farmers Merchants and Eagle Financial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Farmers and Eagle is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Merchants Bancorp and Eagle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Services 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 Eagle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Financial Services has no effect on the direction of Farmers Merchants i.e., Farmers Merchants and Eagle Financial go up and down completely randomly.
Pair Corralation between Farmers Merchants and Eagle Financial
Given the investment horizon of 90 days Farmers Merchants Bancorp is expected to generate 1.65 times more return on investment than Eagle Financial. However, Farmers Merchants is 1.65 times more volatile than Eagle Financial Services. It trades about -0.22 of its potential returns per unit of risk. Eagle Financial Services is currently generating about -0.48 per unit of risk. If you would invest 2,720 in Farmers Merchants Bancorp on November 28, 2024 and sell it today you would lose (222.00) from holding Farmers Merchants Bancorp or give up 8.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Farmers Merchants Bancorp vs. Eagle Financial Services
Performance |
| Timeline |
| Farmers Merchants Bancorp |
| Eagle Financial Services |
Farmers Merchants and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Merchants and Eagle Financial
The main advantage of trading using opposite Farmers Merchants and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Merchants position performs unexpectedly, Eagle 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 Eagle Financial will offset losses from the drop in Eagle Financial'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 |
| Eagle Financial vs. Chesapeake Finl Shs | Eagle Financial vs. PSB Holdings | Eagle Financial vs. Farmers Merchants Bancorp | Eagle Financial vs. First 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |