Correlation Between Farmers Merchants and Birchcliff Energy
Can any of the company-specific risk be diversified away by investing in both Farmers Merchants and Birchcliff Energy 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 Birchcliff Energy 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 Birchcliff Energy, you can compare the effects of market volatilities on Farmers Merchants and Birchcliff Energy 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 Birchcliff Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Merchants and Birchcliff Energy.
Diversification Opportunities for Farmers Merchants and Birchcliff Energy
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farmers and Birchcliff is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Merchants Bancorp and Birchcliff Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchcliff Energy 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 Birchcliff Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchcliff Energy has no effect on the direction of Farmers Merchants i.e., Farmers Merchants and Birchcliff Energy go up and down completely randomly.
Pair Corralation between Farmers Merchants and Birchcliff Energy
Given the investment horizon of 90 days Farmers Merchants Bancorp is expected to generate 1.09 times more return on investment than Birchcliff Energy. However, Farmers Merchants is 1.09 times more volatile than Birchcliff Energy. It trades about 0.14 of its potential returns per unit of risk. Birchcliff Energy is currently generating about 0.03 per unit of risk. If you would invest 96,707 in Farmers Merchants Bancorp on September 1, 2024 and sell it today you would earn a total of 7,893 from holding Farmers Merchants Bancorp or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Farmers Merchants Bancorp vs. Birchcliff Energy
Performance |
| Timeline |
| Farmers Merchants Bancorp |
| Birchcliff Energy |
Farmers Merchants and Birchcliff Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Merchants and Birchcliff Energy
The main advantage of trading using opposite Farmers Merchants and Birchcliff Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Merchants position performs unexpectedly, Birchcliff Energy 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 Birchcliff Energy will offset losses from the drop in Birchcliff Energy's long position.| Farmers Merchants vs. PSB Holdings | Farmers Merchants vs. Eagle Financial Services | Farmers Merchants vs. National Capital Bank | Farmers Merchants vs. Community Heritage Financial |
| Birchcliff Energy vs. Tamarack Valley Energy | Birchcliff Energy vs. Peyto ExplorationDevelopment Corp | Birchcliff Energy vs. Gear Energy | Birchcliff Energy vs. Spartan Delta Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world |