Correlation Between Farmers Bancorp and Blackhawk Growth

Can any of the company-specific risk be diversified away by investing in both Farmers Bancorp and Blackhawk Growth 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 Farmers Bancorp and Blackhawk Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Farmers Bancorp and Blackhawk Growth Corp, you can compare the effects of market volatilities on Farmers Bancorp and Blackhawk Growth 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 Farmers Bancorp with a short position of Blackhawk Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Bancorp and Blackhawk Growth.

Diversification Opportunities for Farmers Bancorp and Blackhawk Growth

-0.63

Correlation Coefficient

Farmers Bancorp  Blackhawk Growth

Excellent diversification

The 3 months correlation between Farmers and Blackhawk is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Bancorp and Blackhawk Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackhawk Growth Corp and Farmers Bancorp 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 Farmers Bancorp are associated (or correlated) with Blackhawk Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackhawk Growth Corp has no effect on the direction of Farmers Bancorp i.e., Farmers Bancorp and Blackhawk Growth go up and down completely randomly.

Pair Corralation between Farmers Bancorp and Blackhawk Growth

If you would invest  3,275  in Farmers Bancorp on September 25, 2024 and sell it today you would earn a total of  573.00  from holding Farmers Bancorp or generate 17.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Farmers Bancorp  vs.  Blackhawk Growth Corp

Farmers Bancorp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Farmers Bancorp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental drivers, Farmers Bancorp reported solid returns over the last few months and may actually be approaching a breakup point.

Blackhawk Growth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackhawk Growth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Farmers Bancorp and Blackhawk Growth

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

The idea behind Farmers Bancorp and Blackhawk Growth Corp 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.