Correlation Between Chemung Financial and HMN Financial
Can any of the company-specific risk be diversified away by investing in both Chemung Financial and HMN 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 Chemung Financial and HMN Financial 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 HMN Financial, you can compare the effects of market volatilities on Chemung Financial and HMN 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 Chemung Financial with a short position of HMN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemung Financial and HMN Financial.
Diversification Opportunities for Chemung Financial and HMN Financial
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chemung and HMN is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Chemung Financial Corp and HMN Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMN Financial 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 HMN Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMN Financial has no effect on the direction of Chemung Financial i.e., Chemung Financial and HMN Financial go up and down completely randomly.
Pair Corralation between Chemung Financial and HMN Financial
If you would invest 4,723 in Chemung Financial Corp on August 27, 2024 and sell it today you would earn a total of 523.00 from holding Chemung Financial Corp or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Chemung Financial Corp vs. HMN Financial
Performance |
| Timeline |
| Chemung Financial Corp |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Chemung Financial and HMN Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemung Financial and HMN Financial
The main advantage of trading using opposite Chemung Financial and HMN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemung Financial position performs unexpectedly, HMN 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 HMN Financial will offset losses from the drop in HMN Financial'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 |
| HMN Financial vs. Magyar Bancorp | HMN Financial vs. Home Federal Bancorp | HMN Financial vs. First Financial Northwest | HMN Financial vs. First Northwest 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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