Correlation Between NYSE Composite and Merchants Bancorp
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Merchants Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Merchants Bancorp PR, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Merchants Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Merchants Bancorp.
Diversification Opportunities for NYSE Composite and Merchants Bancorp
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Merchants is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Merchants Bancorp PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merchants Bancorp 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 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 NYSE Composite i.e., NYSE Composite and Merchants Bancorp go up and down completely randomly.
Pair Corralation between NYSE Composite and Merchants Bancorp
If you would invest 1,923,895 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 103,309 from holding NYSE Composite or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
NYSE Composite vs. Merchants Bancorp PR
Performance |
| Timeline |
NYSE Composite and Merchants Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Merchants Bancorp PR
Pair trading matchups for Merchants Bancorp
Pair Trading with NYSE Composite and Merchants Bancorp
The main advantage of trading using opposite NYSE Composite and Merchants Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Merchants Bancorp vs. Merchants Bancorp | Merchants Bancorp vs. Valley National Bancorp | Merchants Bancorp vs. Valley National Bancorp | Merchants Bancorp vs. Wintrust Financial Corp |
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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