Correlation Between Merchants Bancorp and Aim Treasurers
Can any of the company-specific risk be diversified away by investing in both Merchants Bancorp and Aim Treasurers 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 Merchants Bancorp and Aim Treasurers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merchants Bancorp and Aim Treasurers Series, you can compare the effects of market volatilities on Merchants Bancorp and Aim Treasurers 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 Merchants Bancorp with a short position of Aim Treasurers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchants Bancorp and Aim Treasurers.
Diversification Opportunities for Merchants Bancorp and Aim Treasurers
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Merchants and Aim is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Merchants Bancorp and Aim Treasurers Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Treasurers Series and Merchants Bancorp 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 Merchants Bancorp are associated (or correlated) with Aim Treasurers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Treasurers Series has no effect on the direction of Merchants Bancorp i.e., Merchants Bancorp and Aim Treasurers go up and down completely randomly.
Pair Corralation between Merchants Bancorp and Aim Treasurers
If you would invest 4,085 in Merchants Bancorp on January 26, 2024 and sell it today you would earn a total of 8.00 from holding Merchants Bancorp or generate 0.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Merchants Bancorp vs. Aim Treasurers Series
Performance |
Timeline |
Merchants Bancorp |
Aim Treasurers Series |
Merchants Bancorp and Aim Treasurers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Merchants Bancorp and Aim Treasurers
The main advantage of trading using opposite Merchants Bancorp and Aim Treasurers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchants Bancorp position performs unexpectedly, Aim Treasurers 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 Aim Treasurers will offset losses from the drop in Aim Treasurers' long position.Merchants Bancorp vs. RBB Bancorp | Merchants Bancorp vs. Midland States Bancorp | Merchants Bancorp vs. SmartFinancial | Merchants Bancorp vs. Business First Bancshares |
Aim Treasurers vs. Vanguard Total Stock | Aim Treasurers vs. Vanguard 500 Index | Aim Treasurers vs. Vanguard Total Stock | Aim Treasurers vs. Vanguard Total Stock |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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