Correlation Between Merchants Bancorp and Southern Banc
Can any of the company-specific risk be diversified away by investing in both Merchants Bancorp and Southern Banc 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 Southern Banc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merchants Bancorp and Southern Banc, you can compare the effects of market volatilities on Merchants Bancorp and Southern Banc 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 Southern Banc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchants Bancorp and Southern Banc.
Diversification Opportunities for Merchants Bancorp and Southern Banc
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Merchants and Southern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Merchants Bancorp and Southern Banc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Banc 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 Southern Banc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Banc has no effect on the direction of Merchants Bancorp i.e., Merchants Bancorp and Southern Banc go up and down completely randomly.
Pair Corralation between Merchants Bancorp and Southern Banc
If you would invest 3,620 in Merchants Bancorp on October 24, 2024 and sell it today you would earn a total of 247.00 from holding Merchants Bancorp or generate 6.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 5.56% |
Values | Daily Returns |
Merchants Bancorp vs. Southern Banc
Performance |
Timeline |
Merchants Bancorp |
Southern Banc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merchants Bancorp and Southern Banc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Merchants Bancorp and Southern Banc
The main advantage of trading using opposite Merchants Bancorp and Southern Banc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchants Bancorp position performs unexpectedly, Southern Banc 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 Banc will offset losses from the drop in Southern Banc's long position.Merchants Bancorp vs. RBB Bancorp | Merchants Bancorp vs. Midland States Bancorp | Merchants Bancorp vs. SmartFinancial, | Merchants Bancorp vs. Business First Bancshares |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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