Correlation Between Cherry Hill and First Farmers

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

By analyzing existing cross correlation between Cherry Hill Mortgage and First Farmers and, you can compare the effects of market volatilities on Cherry Hill and First Farmers 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 Cherry Hill with a short position of First Farmers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cherry Hill and First Farmers.

Diversification Opportunities for Cherry Hill and First Farmers

-0.35

Correlation Coefficient

Cherry Hill  First Farmers

Very good diversification

The 3 months correlation between Cherry and First is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cherry Hill Mortgage and First Farmers and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Farmers and Cherry Hill 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 Cherry Hill Mortgage are associated (or correlated) with First Farmers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Farmers has no effect on the direction of Cherry Hill i.e., Cherry Hill and First Farmers go up and down completely randomly.

Pair Corralation between Cherry Hill and First Farmers

Given the investment horizon of 90 days Cherry Hill Mortgage is expected to under-perform the First Farmers. In addition to that, Cherry Hill is 3.75 times more volatile than First Farmers and. It trades about -0.13 of its total potential returns per unit of risk. First Farmers and is currently generating about 0.18 per unit of volatility. If you would invest  4,387  in First Farmers and on August 15, 2025 and sell it today you would earn a total of  313.00  from holding First Farmers and or generate 7.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cherry Hill Mortgage  vs.  First Farmers and

Cherry Hill Mortgage

Risk-Adjusted Performance

Weakest

Over the last 90 days Cherry Hill Mortgage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in December 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

First Farmers

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Farmers and are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, First Farmers may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Cherry Hill and First Farmers

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

The idea behind Cherry Hill Mortgage and First Farmers and 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.