Correlation Between Highest Performances and Merchants Bancorp
Can any of the company-specific risk be diversified away by investing in both Highest Performances 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 Highest Performances and Merchants Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highest Performances Holdings and Merchants Bancorp, you can compare the effects of market volatilities on Highest Performances 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 Highest Performances with a short position of Merchants Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highest Performances and Merchants Bancorp.
Diversification Opportunities for Highest Performances and Merchants Bancorp
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Highest and Merchants is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Highest Performances Holdings and Merchants Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merchants Bancorp and Highest Performances 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 Highest Performances Holdings 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 Highest Performances i.e., Highest Performances and Merchants Bancorp go up and down completely randomly.
Pair Corralation between Highest Performances and Merchants Bancorp
Considering the 90-day investment horizon Highest Performances Holdings is expected to under-perform the Merchants Bancorp. In addition to that, Highest Performances is 4.13 times more volatile than Merchants Bancorp. It trades about -0.11 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highest Performances Holdings vs. Merchants Bancorp
Performance |
| Timeline |
| Highest Performances |
| Merchants Bancorp |
Highest Performances and Merchants Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highest Performances and Merchants Bancorp
The main advantage of trading using opposite Highest Performances and Merchants Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highest Performances 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.| Highest Performances vs. BRP Inc | Highest Performances vs. PennantPark Floating Rate | Highest Performances vs. Modine Manufacturing | Highest Performances vs. SLR Investment Corp |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stocks Directory Find actively traded stocks across global markets |