Correlation Between Citizens Holding and Chemung Financial
Can any of the company-specific risk be diversified away by investing in both Citizens Holding and Chemung Financial 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 Citizens Holding and Chemung Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Holding and Chemung Financial Corp, you can compare the effects of market volatilities on Citizens Holding and Chemung Financial 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 Citizens Holding with a short position of Chemung Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Holding and Chemung Financial.
Diversification Opportunities for Citizens Holding and Chemung Financial
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citizens and Chemung is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Holding and Chemung Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemung Financial Corp and Citizens Holding 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 Citizens Holding are associated (or correlated) with Chemung Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemung Financial Corp has no effect on the direction of Citizens Holding i.e., Citizens Holding and Chemung Financial go up and down completely randomly.
Pair Corralation between Citizens Holding and Chemung Financial
Given the investment horizon of 90 days Citizens Holding is expected to under-perform the Chemung Financial. But the stock apears to be less risky and, when comparing its historical volatility, Citizens Holding is 1.5 times less risky than Chemung Financial. The stock trades about 0.0 of its potential returns per unit of risk. The Chemung Financial Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,690 in Chemung Financial Corp on August 28, 2024 and sell it today you would earn a total of 1,556 from holding Chemung Financial Corp or generate 42.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.24% |
| Values | Daily Returns |
Citizens Holding vs. Chemung Financial Corp
Performance |
| Timeline |
| Citizens Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chemung Financial Corp |
Citizens Holding and Chemung Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Holding and Chemung Financial
The main advantage of trading using opposite Citizens Holding and Chemung Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Holding position performs unexpectedly, Chemung Financial 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 Chemung Financial will offset losses from the drop in Chemung Financial's long position.| Citizens Holding vs. Home Federal Bancorp | Citizens Holding vs. Lake Shore Bancorp | Citizens Holding vs. Community West Bancshares | Citizens Holding vs. Magyar Bancorp |
| Chemung Financial vs. Finward Bancorp | Chemung Financial vs. Community West Bancshares | Chemung Financial vs. First Financial Northwest | Chemung Financial vs. Oak Valley 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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