Correlation Between Bondbloxx ETF and Farmers Bank

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

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

Diversification Opportunities for Bondbloxx ETF and Farmers Bank

-0.26

Correlation Coefficient

Bondbloxx ETF  Farmers Bank

Very good diversification

The 3 months correlation between Bondbloxx and Farmers is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and The Farmers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Bank and Bondbloxx ETF 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 Bondbloxx ETF Trust are associated (or correlated) with Farmers Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Bank has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Farmers Bank go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Farmers Bank

Given the investment horizon of 90 days Bondbloxx ETF Trust is expected to generate 0.06 times more return on investment than Farmers Bank. However, Bondbloxx ETF Trust is 16.08 times less risky than Farmers Bank. It trades about 0.1 of its potential returns per unit of risk. The Farmers Bank is currently generating about 0.0 per unit of risk. If you would invest  4,548  in Bondbloxx ETF Trust on September 14, 2024 and sell it today you would earn a total of  366.50  from holding Bondbloxx ETF Trust or generate 8.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.57%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  The Farmers Bank

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.

Farmers Bank

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Farmers Bank are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Farmers Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bondbloxx ETF and Farmers Bank

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

The idea behind Bondbloxx ETF Trust and The Farmers Bank 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.