Correlation Between First Merchants and BAKER
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By analyzing existing cross correlation between First Merchants and BAKER HUGHES A, you can compare the effects of market volatilities on First Merchants and BAKER 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 BAKER. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Merchants and BAKER.
Diversification Opportunities for First Merchants and BAKER
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and BAKER is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding First Merchants and BAKER HUGHES A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAKER HUGHES A 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 BAKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAKER HUGHES A has no effect on the direction of First Merchants i.e., First Merchants and BAKER go up and down completely randomly.
Pair Corralation between First Merchants and BAKER
Given the investment horizon of 90 days First Merchants is expected to generate 2.8 times more return on investment than BAKER. However, First Merchants is 2.8 times more volatile than BAKER HUGHES A. It trades about 0.08 of its potential returns per unit of risk. BAKER HUGHES A is currently generating about -0.08 per unit of risk. If you would invest 3,667 in First Merchants on September 24, 2024 and sell it today you would earn a total of 422.00 from holding First Merchants or generate 11.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 85.94% |
Values | Daily Returns |
First Merchants vs. BAKER HUGHES A
Performance |
Timeline |
First Merchants |
BAKER HUGHES A |
First Merchants and BAKER Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Merchants and BAKER
The main advantage of trading using opposite First Merchants and BAKER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Merchants position performs unexpectedly, BAKER 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 BAKER will offset losses from the drop in BAKER'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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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