Correlation Between First Merchants and 191216DK3
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By analyzing existing cross correlation between First Merchants and COCA COLA CO, you can compare the effects of market volatilities on First Merchants and 191216DK3 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 191216DK3. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Merchants and 191216DK3.
Diversification Opportunities for First Merchants and 191216DK3
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and 191216DK3 is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding First Merchants and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO 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 191216DK3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of First Merchants i.e., First Merchants and 191216DK3 go up and down completely randomly.
Pair Corralation between First Merchants and 191216DK3
Given the investment horizon of 90 days First Merchants is expected to generate 4.24 times more return on investment than 191216DK3. However, First Merchants is 4.24 times more volatile than COCA COLA CO. It trades about 0.07 of its potential returns per unit of risk. COCA COLA CO is currently generating about 0.03 per unit of risk. If you would invest 3,287 in First Merchants on September 24, 2024 and sell it today you would earn a total of 802.00 from holding First Merchants or generate 24.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.78% |
Values | Daily Returns |
First Merchants vs. COCA COLA CO
Performance |
Timeline |
First Merchants |
COCA A CO |
First Merchants and 191216DK3 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Merchants and 191216DK3
The main advantage of trading using opposite First Merchants and 191216DK3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Merchants position performs unexpectedly, 191216DK3 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 191216DK3 will offset losses from the drop in 191216DK3's long position.First Merchants vs. Home Federal Bancorp | First Merchants vs. First Northwest Bancorp | First Merchants vs. HomeTrust Bancshares | First Merchants vs. Lake Shore Bancorp |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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