Correlation Between Chemung Financial and Banco Del
Can any of the company-specific risk be diversified away by investing in both Chemung Financial and Banco Del 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 Chemung Financial and Banco Del into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemung Financial Corp and Banco del Bajo, you can compare the effects of market volatilities on Chemung Financial and Banco Del 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 Chemung Financial with a short position of Banco Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemung Financial and Banco Del.
Diversification Opportunities for Chemung Financial and Banco Del
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chemung and Banco is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Chemung Financial Corp and Banco del Bajo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco del Bajo and Chemung 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 Chemung Financial Corp are associated (or correlated) with Banco Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco del Bajo has no effect on the direction of Chemung Financial i.e., Chemung Financial and Banco Del go up and down completely randomly.
Pair Corralation between Chemung Financial and Banco Del
Given the investment horizon of 90 days Chemung Financial Corp is expected to generate 0.78 times more return on investment than Banco Del. However, Chemung Financial Corp is 1.29 times less risky than Banco Del. It trades about 0.23 of its potential returns per unit of risk. Banco del Bajo is currently generating about -0.21 per unit of risk. If you would invest 4,778 in Chemung Financial Corp on September 1, 2024 and sell it today you would earn a total of 455.00 from holding Chemung Financial Corp or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 33.33% |
| Values | Daily Returns |
Chemung Financial Corp vs. Banco del Bajo
Performance |
| Timeline |
| Chemung Financial Corp |
| Banco del Bajo |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chemung Financial and Banco Del Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemung Financial and Banco Del
The main advantage of trading using opposite Chemung Financial and Banco Del positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemung Financial position performs unexpectedly, Banco Del 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 Banco Del will offset losses from the drop in Banco Del's long position.| Chemung Financial vs. Affinity Bancshares | Chemung Financial vs. Southern California Bancorp | Chemung Financial vs. Auburn National Bancorporation | Chemung Financial vs. BayCom Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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