Correlation Between Bank7 Corp and Chemung Financial
Can any of the company-specific risk be diversified away by investing in both Bank7 Corp 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 Bank7 Corp and Chemung Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank7 Corp and Chemung Financial Corp, you can compare the effects of market volatilities on Bank7 Corp 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 Bank7 Corp with a short position of Chemung Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank7 Corp and Chemung Financial.
Diversification Opportunities for Bank7 Corp and Chemung Financial
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank7 and Chemung is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bank7 Corp 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 Bank7 Corp 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 Bank7 Corp 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 Bank7 Corp i.e., Bank7 Corp and Chemung Financial go up and down completely randomly.
Pair Corralation between Bank7 Corp and Chemung Financial
Given the investment horizon of 90 days Bank7 Corp is expected to generate 1.46 times more return on investment than Chemung Financial. However, Bank7 Corp is 1.46 times more volatile than Chemung Financial Corp. It trades about 0.07 of its potential returns per unit of risk. Chemung Financial Corp is currently generating about 0.03 per unit of risk. If you would invest 2,489 in Bank7 Corp on August 30, 2024 and sell it today you would earn a total of 2,274 from holding Bank7 Corp or generate 91.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank7 Corp vs. Chemung Financial Corp
Performance |
| Timeline |
| Bank7 Corp |
| Chemung Financial Corp |
Bank7 Corp and Chemung Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank7 Corp and Chemung Financial
The main advantage of trading using opposite Bank7 Corp and Chemung Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank7 Corp 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.| Bank7 Corp vs. Home Federal Bancorp | Bank7 Corp vs. First Financial Northwest | Bank7 Corp vs. First Northwest Bancorp | Bank7 Corp vs. First Capital |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |