Correlation Between Chemung Financial and Citizens Northern
Can any of the company-specific risk be diversified away by investing in both Chemung Financial and Citizens Northern 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 Citizens Northern 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 Citizens Northern Corp, you can compare the effects of market volatilities on Chemung Financial and Citizens Northern 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 Citizens Northern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemung Financial and Citizens Northern.
Diversification Opportunities for Chemung Financial and Citizens Northern
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chemung and Citizens is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chemung Financial Corp and Citizens Northern Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Northern Corp 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 Citizens Northern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Northern Corp has no effect on the direction of Chemung Financial i.e., Chemung Financial and Citizens Northern go up and down completely randomly.
Pair Corralation between Chemung Financial and Citizens Northern
Given the investment horizon of 90 days Chemung Financial Corp is expected to generate 0.67 times more return on investment than Citizens Northern. However, Chemung Financial Corp is 1.5 times less risky than Citizens Northern. It trades about 0.03 of its potential returns per unit of risk. Citizens Northern Corp is currently generating about 0.01 per unit of risk. If you would invest 4,276 in Chemung Financial Corp on August 30, 2024 and sell it today you would earn a total of 907.00 from holding Chemung Financial Corp or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemung Financial Corp vs. Citizens Northern Corp
Performance |
| Timeline |
| Chemung Financial Corp |
| Citizens Northern Corp |
Chemung Financial and Citizens Northern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemung Financial and Citizens Northern
The main advantage of trading using opposite Chemung Financial and Citizens Northern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemung Financial position performs unexpectedly, Citizens Northern 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 Citizens Northern will offset losses from the drop in Citizens Northern's long position.| Chemung Financial vs. Finward Bancorp | Chemung Financial vs. Community West Bancshares | Chemung Financial vs. First Financial Northwest | Chemung Financial vs. Oak Valley Bancorp |
| Citizens Northern vs. Penns Woods Bancorp | Citizens Northern vs. Chemung Financial Corp | Citizens Northern vs. Enterprise 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.
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