Correlation Between Safe and Southern Michigan
Can any of the company-specific risk be diversified away by investing in both Safe and Southern Michigan 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 Safe and Southern Michigan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe and Green and Southern Michigan Bancorp, you can compare the effects of market volatilities on Safe and Southern Michigan 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 Safe with a short position of Southern Michigan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe and Southern Michigan.
Diversification Opportunities for Safe and Southern Michigan
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Safe and Southern is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Safe and Green and Southern Michigan Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Michigan Bancorp and Safe 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 Safe and Green are associated (or correlated) with Southern Michigan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Michigan Bancorp has no effect on the direction of Safe i.e., Safe and Southern Michigan go up and down completely randomly.
Pair Corralation between Safe and Southern Michigan
Considering the 90-day investment horizon Safe and Green is expected to under-perform the Southern Michigan. In addition to that, Safe is 6.22 times more volatile than Southern Michigan Bancorp. It trades about -0.13 of its total potential returns per unit of risk. Southern Michigan Bancorp is currently generating about 0.1 per unit of volatility. If you would invest 1,616 in Southern Michigan Bancorp on August 29, 2024 and sell it today you would earn a total of 259.00 from holding Southern Michigan Bancorp or generate 16.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Safe and Green vs. Southern Michigan Bancorp
Performance |
| Timeline |
| Safe and Green |
| Southern Michigan Bancorp |
Safe and Southern Michigan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe and Southern Michigan
The main advantage of trading using opposite Safe and Southern Michigan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe position performs unexpectedly, Southern Michigan 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 Michigan will offset losses from the drop in Southern Michigan's long position.| Safe vs. Sun Hung Kai | Safe vs. Bayport International Holdings | Safe vs. Landsea Homes Corp | Safe vs. Sino Land Co |
| Southern Michigan vs. Invesco High Income | Southern Michigan vs. Blackrock Muniholdings Ny | Southern Michigan vs. Nuveen California Select | Southern Michigan vs. MFS Investment Grade |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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