Correlation Between Farmers Merchants and Newcore Gold
Can any of the company-specific risk be diversified away by investing in both Farmers Merchants and Newcore Gold 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 Newcore Gold 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 Newcore Gold, you can compare the effects of market volatilities on Farmers Merchants and Newcore Gold 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 Newcore Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Merchants and Newcore Gold.
Diversification Opportunities for Farmers Merchants and Newcore Gold
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farmers and Newcore is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Merchants Bancorp and Newcore Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcore Gold 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 Newcore Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcore Gold has no effect on the direction of Farmers Merchants i.e., Farmers Merchants and Newcore Gold go up and down completely randomly.
Pair Corralation between Farmers Merchants and Newcore Gold
Given the investment horizon of 90 days Farmers Merchants Bancorp is expected to under-perform the Newcore Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Farmers Merchants Bancorp is 3.06 times less risky than Newcore Gold. The otc stock trades about -0.04 of its potential returns per unit of risk. The Newcore Gold is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Newcore Gold on November 28, 2024 and sell it today you would earn a total of 3.00 from holding Newcore Gold or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farmers Merchants Bancorp vs. Newcore Gold
Performance |
| Timeline |
| Farmers Merchants Bancorp |
| Newcore Gold |
Farmers Merchants and Newcore Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Merchants and Newcore Gold
The main advantage of trading using opposite Farmers Merchants and Newcore Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Merchants position performs unexpectedly, Newcore Gold 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 Newcore Gold will offset losses from the drop in Newcore Gold'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 |
| Newcore Gold vs. Norsemont Mining | Newcore Gold vs. Cerrado Gold | Newcore Gold vs. Vior Inc | Newcore Gold vs. Peloton Minerals |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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