Correlation Between Logansport Financial and Farmers Merchants

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

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

Diversification Opportunities for Logansport Financial and Farmers Merchants

0.0

Correlation Coefficient

Logansport Financial  Farmers Merchants

Pay attention - limited upside

The 3 months correlation between Logansport and Farmers is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Logansport Financial Corp and Farmers Merchants Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Merchants Bancorp and Logansport Financial 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 Logansport Financial Corp are associated (or correlated) with Farmers Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Merchants Bancorp has no effect on the direction of Logansport Financial i.e., Logansport Financial and Farmers Merchants go up and down completely randomly.

Pair Corralation between Logansport Financial and Farmers Merchants

If you would invest (100.00) in Logansport Financial Corp on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Logansport Financial Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Logansport Financial Corp  vs.  Farmers Merchants Bancorp

Logansport Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Logansport Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Logansport Financial is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Farmers Merchants Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Farmers Merchants Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Logansport Financial and Farmers Merchants

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

The idea behind Logansport Financial Corp and Farmers Merchants Bancorp 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.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..