Correlation Between Southern California and Chemung Financial
Can any of the company-specific risk be diversified away by investing in both Southern California and Chemung Financial 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 Southern California and Chemung Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern California Bancorp and Chemung Financial Corp, you can compare the effects of market volatilities on Southern California and Chemung Financial 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 Southern California with a short position of Chemung Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern California and Chemung Financial.
Diversification Opportunities for Southern California and Chemung Financial
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Southern and Chemung is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Southern California Bancorp and Chemung Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemung Financial Corp and Southern California 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 Southern California Bancorp are associated (or correlated) with Chemung Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemung Financial Corp has no effect on the direction of Southern California i.e., Southern California and Chemung Financial go up and down completely randomly.
Pair Corralation between Southern California and Chemung Financial
Given the investment horizon of 90 days Southern California Bancorp is expected to generate 1.28 times more return on investment than Chemung Financial. However, Southern California is 1.28 times more volatile than Chemung Financial Corp. It trades about 0.44 of its potential returns per unit of risk. Chemung Financial Corp is currently generating about 0.26 per unit of risk. If you would invest 1,427 in Southern California Bancorp on August 28, 2024 and sell it today you would earn a total of 368.00 from holding Southern California Bancorp or generate 25.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern California Bancorp vs. Chemung Financial Corp
Performance |
| Timeline |
| Southern California |
| Chemung Financial Corp |
Southern California and Chemung Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern California and Chemung Financial
The main advantage of trading using opposite Southern California and Chemung Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern California position performs unexpectedly, Chemung Financial 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 Chemung Financial will offset losses from the drop in Chemung Financial's long position.| Southern California vs. Avidbank Holdings | Southern California vs. American Riviera Bank | Southern California vs. American Business Bk | Southern California vs. Private Bancorp of |
| Chemung Financial vs. Finward Bancorp | Chemung Financial vs. Community West Bancshares | Chemung Financial vs. First Financial Northwest | Chemung Financial vs. Oak Valley 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |