Correlation Between Grand River and Southern Michigan
Can any of the company-specific risk be diversified away by investing in both Grand River and Southern Michigan 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 Grand River and Southern Michigan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand River Commerce and Southern Michigan Bancorp, you can compare the effects of market volatilities on Grand River and Southern Michigan 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 Grand River with a short position of Southern Michigan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand River and Southern Michigan.
Diversification Opportunities for Grand River and Southern Michigan
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grand and Southern is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Grand River Commerce and Southern Michigan Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Michigan Bancorp and Grand River 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 Grand River Commerce are associated (or correlated) with Southern Michigan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Michigan Bancorp has no effect on the direction of Grand River i.e., Grand River and Southern Michigan go up and down completely randomly.
Pair Corralation between Grand River and Southern Michigan
Given the investment horizon of 90 days Grand River Commerce is expected to generate 3.35 times more return on investment than Southern Michigan. However, Grand River is 3.35 times more volatile than Southern Michigan Bancorp. It trades about 0.22 of its potential returns per unit of risk. Southern Michigan Bancorp is currently generating about 0.34 per unit of risk. If you would invest 269.00 in Grand River Commerce on September 12, 2024 and sell it today you would earn a total of 26.00 from holding Grand River Commerce or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand River Commerce vs. Southern Michigan Bancorp
Performance |
| Timeline |
| Grand River Commerce |
| Southern Michigan Bancorp |
Grand River and Southern Michigan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand River and Southern Michigan
The main advantage of trading using opposite Grand River and Southern Michigan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand River position performs unexpectedly, Southern Michigan 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 Southern Michigan will offset losses from the drop in Southern Michigan's long position.| Grand River vs. FS Bancorp | Grand River vs. Eastern Michigan Financial | Grand River vs. Bank of Botetourt | Grand River vs. FNB Inc |
| Southern Michigan vs. FS Bancorp | Southern Michigan vs. Eastern Michigan Financial | Southern Michigan vs. Grand River Commerce | Southern Michigan vs. Bank of Botetourt |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |