Correlation Between Farmers National and Grand River
Can any of the company-specific risk be diversified away by investing in both Farmers National and Grand River 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 National and Grand River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmers National Banc and Grand River Commerce, you can compare the effects of market volatilities on Farmers National and Grand River 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 National with a short position of Grand River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers National and Grand River.
Diversification Opportunities for Farmers National and Grand River
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farmers and Grand is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Farmers National Banc and Grand River Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand River Commerce and Farmers National 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 National Banc are associated (or correlated) with Grand River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand River Commerce has no effect on the direction of Farmers National i.e., Farmers National and Grand River go up and down completely randomly.
Pair Corralation between Farmers National and Grand River
Given the investment horizon of 90 days Farmers National Banc is expected to generate 0.92 times more return on investment than Grand River. However, Farmers National Banc is 1.09 times less risky than Grand River. It trades about 0.2 of its potential returns per unit of risk. Grand River Commerce is currently generating about 0.04 per unit of risk. If you would invest 1,376 in Farmers National Banc on September 1, 2024 and sell it today you would earn a total of 189.00 from holding Farmers National Banc or generate 13.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farmers National Banc vs. Grand River Commerce
Performance |
| Timeline |
| Farmers National Banc |
| Grand River Commerce |
Farmers National and Grand River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers National and Grand River
The main advantage of trading using opposite Farmers National and Grand River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers National position performs unexpectedly, Grand River 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 Grand River will offset losses from the drop in Grand River's long position.| Farmers National vs. Affinity Bancshares | Farmers National vs. Southern California Bancorp | Farmers National vs. Auburn National Bancorporation | Farmers National vs. BayCom Corp |
| Grand River vs. FS Bancorp | Grand River vs. Eastern Michigan Financial | Grand River vs. Bank of Botetourt | Grand River vs. FNB Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |