Correlation Between Auburn National and CHS
Can any of the company-specific risk be diversified away by investing in both Auburn National and CHS 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 Auburn National and CHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auburn National Bancorporation and CHS Inc CN, you can compare the effects of market volatilities on Auburn National and CHS 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 Auburn National with a short position of CHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and CHS.
Diversification Opportunities for Auburn National and CHS
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auburn and CHS is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and CHS Inc CN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHS Inc CN and Auburn National 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 Auburn National Bancorporation are associated (or correlated) with CHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHS Inc CN has no effect on the direction of Auburn National i.e., Auburn National and CHS go up and down completely randomly.
Pair Corralation between Auburn National and CHS
Given the investment horizon of 90 days Auburn National is expected to generate 1.03 times less return on investment than CHS. In addition to that, Auburn National is 3.76 times more volatile than CHS Inc CN. It trades about 0.01 of its total potential returns per unit of risk. CHS Inc CN is currently generating about 0.05 per unit of volatility. If you would invest 2,222 in CHS Inc CN on August 31, 2024 and sell it today you would earn a total of 319.00 from holding CHS Inc CN or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.53% |
| Values | Daily Returns |
Auburn National Bancorp. vs. CHS Inc CN
Performance |
| Timeline |
| Auburn National Banc |
| CHS Inc CN |
Auburn National and CHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and CHS
The main advantage of trading using opposite Auburn National and CHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National position performs unexpectedly, CHS 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 CHS will offset losses from the drop in CHS's long position.| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California Bancorp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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