Correlation Between Farmers and LINKBANCORP
Can any of the company-specific risk be diversified away by investing in both Farmers and LINKBANCORP 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 and LINKBANCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmers And Merchants and LINKBANCORP, you can compare the effects of market volatilities on Farmers and LINKBANCORP 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 with a short position of LINKBANCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers and LINKBANCORP.
Diversification Opportunities for Farmers and LINKBANCORP
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Farmers and LINKBANCORP is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Farmers And Merchants and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP and Farmers 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 And Merchants are associated (or correlated) with LINKBANCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINKBANCORP has no effect on the direction of Farmers i.e., Farmers and LINKBANCORP go up and down completely randomly.
Pair Corralation between Farmers and LINKBANCORP
Given the investment horizon of 90 days Farmers And Merchants is expected to under-perform the LINKBANCORP. But the otc stock apears to be less risky and, when comparing its historical volatility, Farmers And Merchants is 3.39 times less risky than LINKBANCORP. The otc stock trades about -0.01 of its potential returns per unit of risk. The LINKBANCORP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 737.00 in LINKBANCORP on December 1, 2024 and sell it today you would earn a total of 25.00 from holding LINKBANCORP or generate 3.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Farmers And Merchants vs. LINKBANCORP
Performance |
Timeline |
Farmers And Merchants |
LINKBANCORP |
Farmers and LINKBANCORP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Farmers and LINKBANCORP
The main advantage of trading using opposite Farmers and LINKBANCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers position performs unexpectedly, LINKBANCORP 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 LINKBANCORP will offset losses from the drop in LINKBANCORP's long position.Farmers vs. First National Bank | Farmers vs. Farmers Merchants Bancorp | Farmers vs. Exchange Bank | Farmers vs. First National of |
LINKBANCORP vs. Home Federal Bancorp | LINKBANCORP vs. Lake Shore Bancorp | LINKBANCORP vs. Community West Bancshares | LINKBANCORP vs. Magyar Bancorp |
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
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |