Correlation Between Farmers Merchants and Glucose Health
Can any of the company-specific risk be diversified away by investing in both Farmers Merchants and Glucose Health 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 Glucose Health 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 Glucose Health, you can compare the effects of market volatilities on Farmers Merchants and Glucose Health 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 Glucose Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Merchants and Glucose Health.
Diversification Opportunities for Farmers Merchants and Glucose Health
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Farmers and Glucose is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Merchants Bancorp and Glucose Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glucose Health 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 Glucose Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glucose Health has no effect on the direction of Farmers Merchants i.e., Farmers Merchants and Glucose Health go up and down completely randomly.
Pair Corralation between Farmers Merchants and Glucose Health
Given the investment horizon of 90 days Farmers Merchants is expected to generate 6.45 times less return on investment than Glucose Health. But when comparing it to its historical volatility, Farmers Merchants Bancorp is 6.76 times less risky than Glucose Health. It trades about 0.02 of its potential returns per unit of risk. Glucose Health is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Glucose Health on August 28, 2024 and sell it today you would lose (54.00) from holding Glucose Health or give up 79.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.1% |
| Values | Daily Returns |
Farmers Merchants Bancorp vs. Glucose Health
Performance |
| Timeline |
| Farmers Merchants Bancorp |
| Glucose Health |
Farmers Merchants and Glucose Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Merchants and Glucose Health
The main advantage of trading using opposite Farmers Merchants and Glucose Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Merchants position performs unexpectedly, Glucose Health 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 Glucose Health will offset losses from the drop in Glucose Health'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 |
| Glucose Health vs. Artisan Consumer Goods | Glucose Health vs. The A2 Milk | Glucose Health vs. BioAdaptives | Glucose Health vs. General Mills |
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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