Correlation Between Chemung Financial and Luther Burbank
Can any of the company-specific risk be diversified away by investing in both Chemung Financial and Luther Burbank 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 Luther Burbank 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 Luther Burbank, you can compare the effects of market volatilities on Chemung Financial and Luther Burbank 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 Luther Burbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemung Financial and Luther Burbank.
Diversification Opportunities for Chemung Financial and Luther Burbank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chemung and Luther is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chemung Financial Corp and Luther Burbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luther Burbank 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 Luther Burbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luther Burbank has no effect on the direction of Chemung Financial i.e., Chemung Financial and Luther Burbank go up and down completely randomly.
Pair Corralation between Chemung Financial and Luther Burbank
Given the investment horizon of 90 days Chemung Financial Corp is expected to generate 0.63 times more return on investment than Luther Burbank. However, Chemung Financial Corp is 1.58 times less risky than Luther Burbank. It trades about 0.03 of its potential returns per unit of risk. Luther Burbank is currently generating about -0.02 per unit of risk. If you would invest 4,374 in Chemung Financial Corp on August 26, 2024 and sell it today you would earn a total of 766.00 from holding Chemung Financial Corp or generate 17.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 31.99% |
| Values | Daily Returns |
Chemung Financial Corp vs. Luther Burbank
Performance |
| Timeline |
| Chemung Financial Corp |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chemung Financial and Luther Burbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemung Financial and Luther Burbank
The main advantage of trading using opposite Chemung Financial and Luther Burbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemung Financial position performs unexpectedly, Luther Burbank 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 Luther Burbank will offset losses from the drop in Luther Burbank'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 |
| Luther Burbank vs. First Community | Luther Burbank vs. Community West Bancshares | Luther Burbank vs. First Financial Northwest | Luther Burbank 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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