Correlation Between Chemung Financial and Peoples Fin
Can any of the company-specific risk be diversified away by investing in both Chemung Financial and Peoples Fin 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 Peoples Fin 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 Peoples Fin, you can compare the effects of market volatilities on Chemung Financial and Peoples Fin 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 Peoples Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemung Financial and Peoples Fin.
Diversification Opportunities for Chemung Financial and Peoples Fin
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chemung and Peoples is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chemung Financial Corp and Peoples Fin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Fin 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 Peoples Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Fin has no effect on the direction of Chemung Financial i.e., Chemung Financial and Peoples Fin go up and down completely randomly.
Pair Corralation between Chemung Financial and Peoples Fin
Given the investment horizon of 90 days Chemung Financial Corp is expected to under-perform the Peoples Fin. But the stock apears to be less risky and, when comparing its historical volatility, Chemung Financial Corp is 1.52 times less risky than Peoples Fin. The stock trades about 0.0 of its potential returns per unit of risk. The Peoples Fin is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,803 in Peoples Fin on October 24, 2024 and sell it today you would earn a total of 229.00 from holding Peoples Fin or generate 4.77% 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. Peoples Fin
Performance |
| Timeline |
| Chemung Financial Corp |
| Peoples Fin |
Chemung Financial and Peoples Fin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemung Financial and Peoples Fin
The main advantage of trading using opposite Chemung Financial and Peoples Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemung Financial position performs unexpectedly, Peoples Fin 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 Peoples Fin will offset losses from the drop in Peoples Fin'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 |
| Peoples Fin vs. Home Federal Bancorp | Peoples Fin vs. Magyar Bancorp | Peoples Fin vs. Finward Bancorp | Peoples Fin vs. Community West Bancshares |
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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