Correlation Between Farmers Merchants and Holloman Energy
Can any of the company-specific risk be diversified away by investing in both Farmers Merchants and Holloman 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 Holloman 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 Holloman Energy Corp, you can compare the effects of market volatilities on Farmers Merchants and Holloman 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 Holloman Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Merchants and Holloman Energy.
Diversification Opportunities for Farmers Merchants and Holloman Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Farmers and Holloman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Merchants Bancorp and Holloman Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holloman Energy 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 Holloman Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holloman Energy Corp has no effect on the direction of Farmers Merchants i.e., Farmers Merchants and Holloman Energy go up and down completely randomly.
Pair Corralation between Farmers Merchants and Holloman Energy
Given the investment horizon of 90 days Farmers Merchants Bancorp is expected to generate 0.07 times more return on investment than Holloman Energy. However, Farmers Merchants Bancorp is 14.07 times less risky than Holloman Energy. It trades about 0.07 of its potential returns per unit of risk. Holloman Energy Corp is currently generating about 0.0 per unit of risk. If you would invest 98,611 in Farmers Merchants Bancorp on August 30, 2024 and sell it today you would earn a total of 10,839 from holding Farmers Merchants Bancorp or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Farmers Merchants Bancorp vs. Holloman Energy Corp
Performance |
| Timeline |
| Farmers Merchants Bancorp |
| Holloman Energy Corp |
Farmers Merchants and Holloman Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Merchants and Holloman Energy
The main advantage of trading using opposite Farmers Merchants and Holloman Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Merchants position performs unexpectedly, Holloman 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 Holloman Energy will offset losses from the drop in Holloman 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 |
| Holloman Energy vs. Yamaha Motor Co | Holloman Energy vs. Nitto Denko Corp | Holloman Energy vs. Farmers Merchants Bancorp | Holloman Energy vs. Furukawa Electric Co |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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