Correlation Between Woodlands Financial and Farmers National
Can any of the company-specific risk be diversified away by investing in both Woodlands Financial and Farmers National 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 Woodlands Financial and Farmers National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woodlands Financial Services and Farmers National Banc, you can compare the effects of market volatilities on Woodlands Financial and Farmers National 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 Woodlands Financial with a short position of Farmers National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woodlands Financial and Farmers National.
Diversification Opportunities for Woodlands Financial and Farmers National
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woodlands and Farmers is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Woodlands Financial Services and Farmers National Banc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers National Banc and Woodlands Financial 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 Woodlands Financial Services are associated (or correlated) with Farmers National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers National Banc has no effect on the direction of Woodlands Financial i.e., Woodlands Financial and Farmers National go up and down completely randomly.
Pair Corralation between Woodlands Financial and Farmers National
Given the investment horizon of 90 days Woodlands Financial Services is expected to under-perform the Farmers National. But the pink sheet apears to be less risky and, when comparing its historical volatility, Woodlands Financial Services is 1.91 times less risky than Farmers National. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Farmers National Banc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,376 in Farmers National Banc on September 1, 2024 and sell it today you would earn a total of 189.00 from holding Farmers National Banc or generate 13.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woodlands Financial Services vs. Farmers National Banc
Performance |
| Timeline |
| Woodlands Financial |
| Farmers National Banc |
Woodlands Financial and Farmers National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woodlands Financial and Farmers National
The main advantage of trading using opposite Woodlands Financial and Farmers National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woodlands Financial position performs unexpectedly, Farmers National 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 National will offset losses from the drop in Farmers National's long position.| Woodlands Financial vs. Bank Mandiri Persero | Woodlands Financial vs. Piraeus Bank SA | Woodlands Financial vs. Kasikornbank Public Co | Woodlands Financial vs. Turkiye Garanti Bankasi |
| Farmers National vs. Affinity Bancshares | Farmers National vs. Southern California Bancorp | Farmers National vs. Auburn National Bancorporation | Farmers National vs. BayCom 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |