Correlation Between Futuretech and Merchants Bancorp
Can any of the company-specific risk be diversified away by investing in both Futuretech and Merchants Bancorp 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 Futuretech and Merchants Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Futuretech II Acquisition and Merchants Bancorp, you can compare the effects of market volatilities on Futuretech and Merchants Bancorp 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 Futuretech with a short position of Merchants Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futuretech and Merchants Bancorp.
Diversification Opportunities for Futuretech and Merchants Bancorp
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Futuretech and Merchants is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Futuretech II Acquisition and Merchants Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merchants Bancorp and Futuretech 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 Futuretech II Acquisition are associated (or correlated) with Merchants Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merchants Bancorp has no effect on the direction of Futuretech i.e., Futuretech and Merchants Bancorp go up and down completely randomly.
Pair Corralation between Futuretech and Merchants Bancorp
Given the investment horizon of 90 days Futuretech II Acquisition is expected to under-perform the Merchants Bancorp. In addition to that, Futuretech is 1.22 times more volatile than Merchants Bancorp. It trades about 0.0 of its total potential returns per unit of risk. Merchants Bancorp is currently generating about 0.35 per unit of volatility. If you would invest 3,600 in Merchants Bancorp on November 3, 2024 and sell it today you would earn a total of 593.00 from holding Merchants Bancorp or generate 16.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Futuretech II Acquisition vs. Merchants Bancorp
Performance |
| Timeline |
| Futuretech II Acquisition |
| Merchants Bancorp |
Futuretech and Merchants Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futuretech and Merchants Bancorp
The main advantage of trading using opposite Futuretech and Merchants Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futuretech position performs unexpectedly, Merchants Bancorp 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 Merchants Bancorp will offset losses from the drop in Merchants Bancorp's long position.| Futuretech vs. Bellevue Life Sciences | Futuretech vs. Manaris Corp | Futuretech vs. AlphaTime Acquisition Corp | Futuretech vs. Embrace Change Acquisition |
| Merchants Bancorp vs. RBB Bancorp | Merchants Bancorp vs. Midland States Bancorp | Merchants Bancorp vs. SmartFinancial, | Merchants Bancorp vs. Business First Bancshares |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |