Correlation Between CNB Financial and Merchants Marine
Can any of the company-specific risk be diversified away by investing in both CNB Financial and Merchants Marine 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 CNB Financial and Merchants Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNB Financial and Merchants Marine Bancorp, you can compare the effects of market volatilities on CNB Financial and Merchants Marine 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 CNB Financial with a short position of Merchants Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNB Financial and Merchants Marine.
Diversification Opportunities for CNB Financial and Merchants Marine
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CNB and Merchants is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CNB Financial and Merchants Marine Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merchants Marine Bancorp and CNB Financial 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 CNB Financial are associated (or correlated) with Merchants Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merchants Marine Bancorp has no effect on the direction of CNB Financial i.e., CNB Financial and Merchants Marine go up and down completely randomly.
Pair Corralation between CNB Financial and Merchants Marine
Given the investment horizon of 90 days CNB Financial is expected to generate 0.97 times more return on investment than Merchants Marine. However, CNB Financial is 1.03 times less risky than Merchants Marine. It trades about 0.06 of its potential returns per unit of risk. Merchants Marine Bancorp is currently generating about 0.0 per unit of risk. If you would invest 2,029 in CNB Financial on September 14, 2024 and sell it today you would earn a total of 698.00 from holding CNB Financial or generate 34.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.2% |
| Values | Daily Returns |
CNB Financial vs. Merchants Marine Bancorp
Performance |
| Timeline |
| CNB Financial |
| Merchants Marine Bancorp |
CNB Financial and Merchants Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNB Financial and Merchants Marine
The main advantage of trading using opposite CNB Financial and Merchants Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNB Financial position performs unexpectedly, Merchants Marine 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 Merchants Marine will offset losses from the drop in Merchants Marine's long position.| CNB Financial vs. Finward Bancorp | CNB Financial vs. Great Southern Bancorp | CNB Financial vs. First Mid Illinois | CNB Financial vs. Franklin Financial Services |
| Merchants Marine vs. PT Bank Rakyat | Merchants Marine vs. Morningstar Unconstrained Allocation | Merchants Marine vs. Bondbloxx ETF Trust | Merchants Marine vs. Spring Valley Acquisition |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| 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 | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |