Correlation Between First Mid and Equity Bancshares,

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

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

Diversification Opportunities for First Mid and Equity Bancshares,

0.95

Correlation Coefficient

First Mid  Equity Bancshares,

Almost no diversification

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

Pair Corralation between First Mid and Equity Bancshares,

Given the investment horizon of 90 days First Mid Illinois is expected to under-perform the Equity Bancshares,. In addition to that, First Mid is 1.11 times more volatile than Equity Bancshares,. It trades about -0.38 of its total potential returns per unit of risk. Equity Bancshares, is currently generating about -0.41 per unit of volatility. 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

First Mid Illinois  vs.  Equity Bancshares,

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.

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.

Pair Trading with First Mid and Equity Bancshares,

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

The idea behind First Mid Illinois and Equity Bancshares, 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.