Correlation Between Farmers Merchants and Minnova Corp
Can any of the company-specific risk be diversified away by investing in both Farmers Merchants and Minnova Corp 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 Minnova Corp 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 Minnova Corp, you can compare the effects of market volatilities on Farmers Merchants and Minnova Corp 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 Minnova Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Merchants and Minnova Corp.
Diversification Opportunities for Farmers Merchants and Minnova Corp
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farmers and Minnova is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Merchants Bancorp and Minnova Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minnova Corp 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 Minnova Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minnova Corp has no effect on the direction of Farmers Merchants i.e., Farmers Merchants and Minnova Corp go up and down completely randomly.
Pair Corralation between Farmers Merchants and Minnova Corp
Given the investment horizon of 90 days Farmers Merchants Bancorp is expected to generate 0.12 times more return on investment than Minnova Corp. However, Farmers Merchants Bancorp is 8.69 times less risky than Minnova Corp. It trades about 0.06 of its potential returns per unit of risk. Minnova Corp is currently generating about -0.13 per unit of risk. If you would invest 99,108 in Farmers Merchants Bancorp on August 29, 2024 and sell it today you would earn a total of 10,342 from holding Farmers Merchants Bancorp or generate 10.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Farmers Merchants Bancorp vs. Minnova Corp
Performance |
| Timeline |
| Farmers Merchants Bancorp |
| Minnova Corp |
Farmers Merchants and Minnova Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Merchants and Minnova Corp
The main advantage of trading using opposite Farmers Merchants and Minnova Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Merchants position performs unexpectedly, Minnova Corp 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 Minnova Corp will offset losses from the drop in Minnova Corp's long position.| Farmers Merchants vs. Invesco High Income | Farmers Merchants vs. Blackrock Muniholdings Ny | Farmers Merchants vs. Nuveen California Select | Farmers Merchants vs. MFS Investment Grade |
| Minnova Corp vs. Blue Star Gold | Minnova Corp vs. Advance Gold Corp | Minnova Corp vs. Angkor Resources Corp | Minnova Corp vs. Advance United Holdings |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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