Correlation Between Chemung Financial and First Community
Can any of the company-specific risk be diversified away by investing in both Chemung Financial and First Community 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 First Community 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 First Community, you can compare the effects of market volatilities on Chemung Financial and First Community 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 First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemung Financial and First Community.
Diversification Opportunities for Chemung Financial and First Community
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chemung and First is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chemung Financial Corp and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community 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 First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community has no effect on the direction of Chemung Financial i.e., Chemung Financial and First Community go up and down completely randomly.
Pair Corralation between Chemung Financial and First Community
Given the investment horizon of 90 days Chemung Financial Corp is expected to generate 1.9 times more return on investment than First Community. However, Chemung Financial is 1.9 times more volatile than First Community. It trades about 0.12 of its potential returns per unit of risk. First Community is currently generating about 0.22 per unit of risk. If you would invest 4,761 in Chemung Financial Corp on November 2, 2024 and sell it today you would earn a total of 380.00 from holding Chemung Financial Corp or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemung Financial Corp vs. First Community
Performance |
| Timeline |
| Chemung Financial Corp |
| First Community |
Chemung Financial and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemung Financial and First Community
The main advantage of trading using opposite Chemung Financial and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemung Financial position performs unexpectedly, First Community 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 First Community will offset losses from the drop in First Community'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 |
| First Community vs. Community West Bancshares | First Community vs. First Financial Northwest | First Community vs. First Northwest Bancorp | First Community vs. Home Federal 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| 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 | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |