Correlation Between Equity Bancshares, and First Mid

Can any of the company-specific risk be diversified away by investing in both Equity Bancshares, and First Mid 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 Equity Bancshares, and First Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Equity Bancshares, and First Mid Illinois, you can compare the effects of market volatilities on Equity Bancshares, and First Mid 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 Equity Bancshares, with a short position of First Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Bancshares, and First Mid.

Diversification Opportunities for Equity Bancshares, and First Mid

0.95

Correlation Coefficient

Equity Bancshares,  First Mid

Almost no diversification

The 3 months correlation between Equity and First is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and First Mid Illinois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mid Illinois and Equity Bancshares, 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 Equity Bancshares, are associated (or correlated) with First Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mid Illinois has no effect on the direction of Equity Bancshares, i.e., Equity Bancshares, and First Mid go up and down completely randomly.

Pair Corralation between Equity Bancshares, and First Mid

Given the investment horizon of 90 days Equity Bancshares, is expected to generate 0.9 times more return on investment than First Mid. However, Equity Bancshares, is 1.11 times less risky than First Mid. It trades about -0.41 of its potential returns per unit of risk. First Mid Illinois is currently generating about -0.38 per unit of risk. If you would invest  4,759  in Equity Bancshares, on October 4, 2024 and sell it today you would lose (517.00) from holding Equity Bancshares, or give up 10.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Equity Bancshares,  vs.  First Mid Illinois

Equity Bancshares,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Bancshares, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Equity Bancshares, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

First Mid Illinois

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Mid Illinois has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, First Mid is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Equity Bancshares, and First Mid

The main advantage of trading using opposite Equity Bancshares, and First Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Bancshares, position performs unexpectedly, First Mid 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 Mid will offset losses from the drop in First Mid's long position.

The idea behind Equity Bancshares, and First Mid Illinois pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.