Correlation Between Farmers Merchants and Meyer Burger
Can any of the company-specific risk be diversified away by investing in both Farmers Merchants and Meyer Burger 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 Meyer Burger 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 Meyer Burger Technology, you can compare the effects of market volatilities on Farmers Merchants and Meyer Burger 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 Meyer Burger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Merchants and Meyer Burger.
Diversification Opportunities for Farmers Merchants and Meyer Burger
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Farmers and Meyer is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Merchants Bancorp and Meyer Burger Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meyer Burger Technology 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 Meyer Burger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meyer Burger Technology has no effect on the direction of Farmers Merchants i.e., Farmers Merchants and Meyer Burger go up and down completely randomly.
Pair Corralation between Farmers Merchants and Meyer Burger
Given the investment horizon of 90 days Farmers Merchants is expected to generate 1659.3 times less return on investment than Meyer Burger. But when comparing it to its historical volatility, Farmers Merchants Bancorp is 162.84 times less risky than Meyer Burger. It trades about 0.02 of its potential returns per unit of risk. Meyer Burger Technology is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 47,250 in Meyer Burger Technology on August 31, 2024 and sell it today you would lose (47,201) from holding Meyer Burger Technology or give up 99.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.76% |
| Values | Daily Returns |
Farmers Merchants Bancorp vs. Meyer Burger Technology
Performance |
| Timeline |
| Farmers Merchants Bancorp |
| Meyer Burger Technology |
Farmers Merchants and Meyer Burger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Merchants and Meyer Burger
The main advantage of trading using opposite Farmers Merchants and Meyer Burger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Merchants position performs unexpectedly, Meyer Burger 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 Meyer Burger will offset losses from the drop in Meyer Burger'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 |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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