Correlation Between CHS and Auburn National
Can any of the company-specific risk be diversified away by investing in both CHS and Auburn National 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 CHS and Auburn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHS Inc CN and Auburn National Bancorporation, you can compare the effects of market volatilities on CHS and Auburn National 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 CHS with a short position of Auburn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHS and Auburn National.
Diversification Opportunities for CHS and Auburn National
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CHS and Auburn is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding CHS Inc CN and Auburn National Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auburn National Banc and CHS 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 CHS Inc CN are associated (or correlated) with Auburn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auburn National Banc has no effect on the direction of CHS i.e., CHS and Auburn National go up and down completely randomly.
Pair Corralation between CHS and Auburn National
Assuming the 90 days horizon CHS Inc CN is expected to generate 0.27 times more return on investment than Auburn National. However, CHS Inc CN is 3.76 times less risky than Auburn National. It trades about 0.05 of its potential returns per unit of risk. Auburn National Bancorporation is currently generating about 0.01 per unit of risk. If you would invest 2,222 in CHS Inc CN on August 31, 2024 and sell it today you would earn a total of 319.00 from holding CHS Inc CN or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.53% |
| Values | Daily Returns |
CHS Inc CN vs. Auburn National Bancorp.
Performance |
| Timeline |
| CHS Inc CN |
| Auburn National Banc |
CHS and Auburn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHS and Auburn National
The main advantage of trading using opposite CHS and Auburn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHS position performs unexpectedly, Auburn National 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 Auburn National will offset losses from the drop in Auburn National's long position.The idea behind CHS Inc CN and Auburn National Bancorporation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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