Correlation Between Merchants Marine and First Bancorp
Can any of the company-specific risk be diversified away by investing in both Merchants Marine and First 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 Marine and First Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merchants Marine Bancorp and First Bancorp, you can compare the effects of market volatilities on Merchants Marine and First 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 Marine with a short position of First Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchants Marine and First Bancorp.
Diversification Opportunities for Merchants Marine and First Bancorp
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Merchants and First is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Merchants Marine Bancorp and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancorp and Merchants Marine 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 Marine Bancorp are associated (or correlated) with First Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of Merchants Marine i.e., Merchants Marine and First Bancorp go up and down completely randomly.
Pair Corralation between Merchants Marine and First Bancorp
Given the investment horizon of 90 days Merchants Marine Bancorp is expected to under-perform the First Bancorp. But the otc stock apears to be less risky and, when comparing its historical volatility, Merchants Marine Bancorp is 1.02 times less risky than First Bancorp. The otc stock trades about 0.0 of its potential returns per unit of risk. The First Bancorp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,373 in First Bancorp on September 14, 2024 and sell it today you would earn a total of 443.00 from holding First Bancorp or generate 18.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.2% |
| Values | Daily Returns |
Merchants Marine Bancorp vs. First Bancorp
Performance |
| Timeline |
| Merchants Marine Bancorp |
| First Bancorp |
Merchants Marine and First Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merchants Marine and First Bancorp
The main advantage of trading using opposite Merchants Marine and First Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchants Marine position performs unexpectedly, First 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 First Bancorp will offset losses from the drop in First Bancorp's long position.| Merchants Marine vs. PT Bank Rakyat | Merchants Marine vs. Morningstar Unconstrained Allocation | Merchants Marine vs. Bondbloxx ETF Trust | Merchants Marine vs. Spring Valley Acquisition |
| First Bancorp vs. LINKBANCORP | First Bancorp vs. Bankwell Financial Group | First Bancorp vs. FS Bancorp | First Bancorp vs. Finward Bancorp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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