Correlation Between Chemung Financial and Old Point
Can any of the company-specific risk be diversified away by investing in both Chemung Financial and Old Point 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 Old Point 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 Old Point Financial, you can compare the effects of market volatilities on Chemung Financial and Old Point 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 Old Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemung Financial and Old Point.
Diversification Opportunities for Chemung Financial and Old Point
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chemung and Old is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Chemung Financial Corp and Old Point Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Point 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 Old Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Point Financial has no effect on the direction of Chemung Financial i.e., Chemung Financial and Old Point go up and down completely randomly.
Pair Corralation between Chemung Financial and Old Point
Given the investment horizon of 90 days Chemung Financial is expected to generate 2.23 times less return on investment than Old Point. In addition to that, Chemung Financial is 1.22 times more volatile than Old Point Financial. It trades about 0.06 of its total potential returns per unit of risk. Old Point Financial is currently generating about 0.17 per unit of volatility. If you would invest 1,855 in Old Point Financial on November 2, 2024 and sell it today you would earn a total of 586.00 from holding Old Point Financial or generate 31.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemung Financial Corp vs. Old Point Financial
Performance |
| Timeline |
| Chemung Financial Corp |
| Old Point Financial |
Chemung Financial and Old Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemung Financial and Old Point
The main advantage of trading using opposite Chemung Financial and Old Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemung Financial position performs unexpectedly, Old Point 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 Old Point will offset losses from the drop in Old Point'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 |
| Old Point vs. First Community | Old Point vs. Oak Valley Bancorp | Old Point vs. Chemung Financial Corp | Old Point vs. Home 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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