Correlation Between CIB Marine and CMUV Bancorp
Can any of the company-specific risk be diversified away by investing in both CIB Marine and CMUV Bancorp 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 CIB Marine and CMUV Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIB Marine Bancshares and CMUV Bancorp, you can compare the effects of market volatilities on CIB Marine and CMUV Bancorp 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 CIB Marine with a short position of CMUV Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIB Marine and CMUV Bancorp.
Diversification Opportunities for CIB Marine and CMUV Bancorp
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CIB and CMUV is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding CIB Marine Bancshares and CMUV Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMUV Bancorp and CIB Marine 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 CIB Marine Bancshares are associated (or correlated) with CMUV Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMUV Bancorp has no effect on the direction of CIB Marine i.e., CIB Marine and CMUV Bancorp go up and down completely randomly.
Pair Corralation between CIB Marine and CMUV Bancorp
Given the investment horizon of 90 days CIB Marine Bancshares is expected to under-perform the CMUV Bancorp. In addition to that, CIB Marine is 1.04 times more volatile than CMUV Bancorp. It trades about -0.05 of its total potential returns per unit of risk. CMUV Bancorp is currently generating about 0.08 per unit of volatility. If you would invest 1,950 in CMUV Bancorp on August 28, 2024 and sell it today you would earn a total of 55.00 from holding CMUV Bancorp or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIB Marine Bancshares vs. CMUV Bancorp
Performance |
| Timeline |
| CIB Marine Bancshares |
| CMUV Bancorp |
CIB Marine and CMUV Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIB Marine and CMUV Bancorp
The main advantage of trading using opposite CIB Marine and CMUV Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIB Marine position performs unexpectedly, CMUV Bancorp 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 CMUV Bancorp will offset losses from the drop in CMUV Bancorp's long position.| CIB Marine vs. U I Financial | CIB Marine vs. Heartland Banccorp | CIB Marine vs. United Bancorporation of | CIB Marine vs. Harbor Bankshares |
| CMUV Bancorp vs. Pioneer Bankcorp | CMUV Bancorp vs. Summit Bancshares | CMUV Bancorp vs. Liberty Northwest Bancorp | CMUV Bancorp vs. First Community |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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