Correlation Between Merchants Bancorp and Codorus Valley
Can any of the company-specific risk be diversified away by investing in both Merchants Bancorp and Codorus Valley 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 Merchants Bancorp and Codorus Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merchants Bancorp and Codorus Valley Bancorp, you can compare the effects of market volatilities on Merchants Bancorp and Codorus Valley 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 Merchants Bancorp with a short position of Codorus Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchants Bancorp and Codorus Valley.
Diversification Opportunities for Merchants Bancorp and Codorus Valley
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Merchants and Codorus is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Merchants Bancorp and Codorus Valley Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codorus Valley Bancorp and Merchants Bancorp 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 Merchants Bancorp are associated (or correlated) with Codorus Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Codorus Valley Bancorp has no effect on the direction of Merchants Bancorp i.e., Merchants Bancorp and Codorus Valley go up and down completely randomly.
Pair Corralation between Merchants Bancorp and Codorus Valley
If you would invest 3,635 in Merchants Bancorp on September 3, 2024 and sell it today you would earn a total of 493.00 from holding Merchants Bancorp or generate 13.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Merchants Bancorp vs. Codorus Valley Bancorp
Performance |
| Timeline |
| Merchants Bancorp |
| Codorus Valley Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merchants Bancorp and Codorus Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merchants Bancorp and Codorus Valley
The main advantage of trading using opposite Merchants Bancorp and Codorus Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchants Bancorp position performs unexpectedly, Codorus Valley 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 Codorus Valley will offset losses from the drop in Codorus Valley's long position.| Merchants Bancorp vs. RBB Bancorp | Merchants Bancorp vs. Midland States Bancorp | Merchants Bancorp vs. SmartFinancial, | Merchants Bancorp vs. Business First Bancshares |
| Codorus Valley vs. Home Federal Bancorp | Codorus Valley vs. First Financial Northwest | Codorus Valley vs. First Northwest Bancorp | Codorus Valley vs. First Capital |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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