Correlation Between 784730AB9 and Southern Michigan

Can any of the company-specific risk be diversified away by investing in both 784730AB9 and Southern Michigan 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 784730AB9 and Southern Michigan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US784730AB94 and Southern Michigan Bancorp, you can compare the effects of market volatilities on 784730AB9 and Southern Michigan 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 784730AB9 with a short position of Southern Michigan. Check out your portfolio center. Please also check ongoing floating volatility patterns of 784730AB9 and Southern Michigan.

Diversification Opportunities for 784730AB9 and Southern Michigan

0.62

Correlation Coefficient

784730AB9  Southern Michigan

Poor diversification

The 3 months correlation between 784730AB9 and Southern is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding US784730AB94 and Southern Michigan Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Michigan Bancorp and 784730AB9 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 US784730AB94 are associated (or correlated) with Southern Michigan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Michigan Bancorp has no effect on the direction of 784730AB9 i.e., 784730AB9 and Southern Michigan go up and down completely randomly.

Pair Corralation between 784730AB9 and Southern Michigan

Assuming the 90 days trading horizon US784730AB94 is expected to under-perform the Southern Michigan. In addition to that, 784730AB9 is 1.49 times more volatile than Southern Michigan Bancorp. It trades about 0.0 of its total potential returns per unit of risk. Southern Michigan Bancorp is currently generating about 0.01 per unit of volatility. If you would invest  1,993  in Southern Michigan Bancorp on September 26, 2024 and sell it today you would lose (68.00) from holding Southern Michigan Bancorp or give up 3.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	40.91%
Values	Daily Returns

US784730AB94  vs.  Southern Michigan Bancorp

US784730AB94

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in US784730AB94 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 784730AB9 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Southern Michigan Bancorp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Southern Michigan Bancorp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal primary indicators, Southern Michigan may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with 784730AB9 and Southern Michigan

The main advantage of trading using opposite 784730AB9 and Southern Michigan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 784730AB9 position performs unexpectedly, Southern Michigan 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 Southern Michigan will offset losses from the drop in Southern Michigan's long position.

The idea behind US784730AB94 and Southern Michigan 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.