Correlation Between NYSE Composite and Farmers
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Farmers 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 NYSE Composite and Farmers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Farmers And Merchants, you can compare the effects of market volatilities on NYSE Composite and Farmers 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 NYSE Composite with a short position of Farmers. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Farmers.
Diversification Opportunities for NYSE Composite and Farmers
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Farmers is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Farmers And Merchants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers And Merchants and NYSE Composite 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 NYSE Composite are associated (or correlated) with Farmers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers And Merchants has no effect on the direction of NYSE Composite i.e., NYSE Composite and Farmers go up and down completely randomly.
Pair Corralation between NYSE Composite and Farmers
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.45 times more return on investment than Farmers. However, NYSE Composite is 2.2 times less risky than Farmers. It trades about 0.08 of its potential returns per unit of risk. Farmers And Merchants is currently generating about -0.03 per unit of risk. If you would invest 1,547,479 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 464,866 from holding NYSE Composite or generate 30.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.99% |
| Values | Daily Returns |
NYSE Composite vs. Farmers And Merchants
Performance |
| Timeline |
NYSE Composite and Farmers Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Farmers And Merchants
Pair trading matchups for Farmers
Pair Trading with NYSE Composite and Farmers
The main advantage of trading using opposite NYSE Composite and Farmers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Farmers 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 Farmers will offset losses from the drop in Farmers' long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Farmers vs. First National Bank | Farmers vs. Farmers Merchants Bancorp | Farmers vs. Exchange Bank | Farmers vs. First National of |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |