Correlation Between Greenville Federal and Farmers Bank
Can any of the company-specific risk be diversified away by investing in both Greenville Federal and Farmers Bank 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 Greenville Federal and Farmers Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenville Federal Financial and The Farmers Bank, you can compare the effects of market volatilities on Greenville Federal and Farmers Bank 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 Greenville Federal with a short position of Farmers Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenville Federal and Farmers Bank.
Diversification Opportunities for Greenville Federal and Farmers Bank
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Greenville and Farmers is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Greenville Federal Financial and The Farmers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Bank and Greenville Federal 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 Greenville Federal Financial are associated (or correlated) with Farmers Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Bank has no effect on the direction of Greenville Federal i.e., Greenville Federal and Farmers Bank go up and down completely randomly.
Pair Corralation between Greenville Federal and Farmers Bank
Given the investment horizon of 90 days Greenville Federal Financial is expected to generate 1.09 times more return on investment than Farmers Bank. However, Greenville Federal is 1.09 times more volatile than The Farmers Bank. It trades about 0.0 of its potential returns per unit of risk. The Farmers Bank is currently generating about -0.01 per unit of risk. If you would invest 900.00 in Greenville Federal Financial on August 26, 2024 and sell it today you would lose (200.00) from holding Greenville Federal Financial or give up 22.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.66% |
| Values | Daily Returns |
Greenville Federal Financial vs. The Farmers Bank
Performance |
| Timeline |
| Greenville Federal |
| Farmers Bank |
Greenville Federal and Farmers Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenville Federal and Farmers Bank
The main advantage of trading using opposite Greenville Federal and Farmers Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenville Federal position performs unexpectedly, Farmers Bank 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 Farmers Bank will offset losses from the drop in Farmers Bank's long position.| Greenville Federal vs. Standard Bank Group | Greenville Federal vs. PSB Holdings | Greenville Federal vs. United Overseas Bank | Greenville Federal vs. Turkiye Garanti Bankasi |
| Farmers Bank vs. CIB Marine Bancshares | Farmers Bank vs. F M Bank | Farmers Bank vs. ENB Financial Corp | Farmers Bank vs. First Bankers Trustshares |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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