Correlation Between First Merchants and 02005NBQ2
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By analyzing existing cross correlation between First Merchants and ALLY 475 09 JUN 27, you can compare the effects of market volatilities on First Merchants and 02005NBQ2 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 Merchants with a short position of 02005NBQ2. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Merchants and 02005NBQ2.
Diversification Opportunities for First Merchants and 02005NBQ2
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and 02005NBQ2 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding First Merchants and ALLY 475 09 JUN 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLY 475 09 and First Merchants 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 Merchants are associated (or correlated) with 02005NBQ2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLY 475 09 has no effect on the direction of First Merchants i.e., First Merchants and 02005NBQ2 go up and down completely randomly.
Pair Corralation between First Merchants and 02005NBQ2
Given the investment horizon of 90 days First Merchants is expected to generate 3.35 times more return on investment than 02005NBQ2. However, First Merchants is 3.35 times more volatile than ALLY 475 09 JUN 27. It trades about 0.07 of its potential returns per unit of risk. ALLY 475 09 JUN 27 is currently generating about -0.11 per unit of risk. If you would invest 3,723 in First Merchants on September 23, 2024 and sell it today you would earn a total of 366.00 from holding First Merchants or generate 9.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.92% |
Values | Daily Returns |
First Merchants vs. ALLY 475 09 JUN 27
Performance |
Timeline |
First Merchants |
ALLY 475 09 |
First Merchants and 02005NBQ2 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Merchants and 02005NBQ2
The main advantage of trading using opposite First Merchants and 02005NBQ2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Merchants position performs unexpectedly, 02005NBQ2 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 02005NBQ2 will offset losses from the drop in 02005NBQ2's long position.First Merchants vs. Home Federal Bancorp | First Merchants vs. First Northwest Bancorp | First Merchants vs. Community West Bancshares | First Merchants vs. HomeTrust Bancshares |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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