Correlation Between Southern Michigan and Bondbloxx ETF

Can any of the company-specific risk be diversified away by investing in both Southern Michigan and Bondbloxx ETF 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 Southern Michigan and Bondbloxx ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Southern Michigan Bancorp and Bondbloxx ETF Trust, you can compare the effects of market volatilities on Southern Michigan and Bondbloxx ETF 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 Southern Michigan with a short position of Bondbloxx ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Michigan and Bondbloxx ETF.

Diversification Opportunities for Southern Michigan and Bondbloxx ETF

-0.33

Correlation Coefficient

Southern Michigan  Bondbloxx ETF

Very good diversification

The 3 months correlation between Southern and Bondbloxx is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Southern Michigan Bancorp and Bondbloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bondbloxx ETF Trust and Southern Michigan 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 Southern Michigan Bancorp are associated (or correlated) with Bondbloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bondbloxx ETF Trust has no effect on the direction of Southern Michigan i.e., Southern Michigan and Bondbloxx ETF go up and down completely randomly.

Pair Corralation between Southern Michigan and Bondbloxx ETF

Given the investment horizon of 90 days Southern Michigan Bancorp is expected to generate 10.08 times more return on investment than Bondbloxx ETF. However, Southern Michigan is 10.08 times more volatile than Bondbloxx ETF Trust. It trades about 0.15 of its potential returns per unit of risk. Bondbloxx ETF Trust is currently generating about 0.2 per unit of risk. If you would invest  1,566  in Southern Michigan Bancorp on September 15, 2024 and sell it today you would earn a total of  359.00  from holding Southern Michigan Bancorp or generate 22.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Southern Michigan Bancorp  vs.  Bondbloxx ETF Trust

Southern Michigan Bancorp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Southern Michigan Bancorp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Southern Michigan exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Southern Michigan and Bondbloxx ETF

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

The idea behind Southern Michigan Bancorp and Bondbloxx ETF Trust 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.