Correlation Between Merchants Bancorp and Merchants Bancorp
Can any of the company-specific risk be diversified away by investing in both Merchants Bancorp 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 Merchants Bancorp and Merchants Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merchants Bancorp and Merchants Bancorp PR, you can compare the effects of market volatilities on Merchants Bancorp 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 Merchants Bancorp with a short position of Merchants Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchants Bancorp and Merchants Bancorp.
Diversification Opportunities for Merchants Bancorp and Merchants Bancorp
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Merchants and Merchants is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Merchants Bancorp and Merchants Bancorp PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merchants 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 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 Merchants Bancorp i.e., Merchants Bancorp and Merchants Bancorp go up and down completely randomly.
Pair Corralation between Merchants Bancorp and Merchants Bancorp
If you would invest 2,113 in Merchants Bancorp on August 25, 2024 and sell it today you would earn a total of 149.00 from holding Merchants Bancorp or generate 7.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 1.54% |
| Values | Daily Returns |
Merchants Bancorp vs. Merchants Bancorp PR
Performance |
| Timeline |
| Merchants Bancorp |
| Merchants Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merchants Bancorp and Merchants Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merchants Bancorp and Merchants Bancorp
The main advantage of trading using opposite Merchants Bancorp and Merchants Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchants Bancorp 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.| Merchants Bancorp vs. Capital One Financial | Merchants Bancorp vs. Capital One Financial | Merchants Bancorp vs. Bank of America | Merchants Bancorp vs. KeyCorp |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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