Correlation Between ChoiceOne Financial and Chemung Financial
Can any of the company-specific risk be diversified away by investing in both ChoiceOne Financial 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 ChoiceOne Financial and Chemung Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChoiceOne Financial Services and Chemung Financial Corp, you can compare the effects of market volatilities on ChoiceOne Financial 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 ChoiceOne Financial with a short position of Chemung Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChoiceOne Financial and Chemung Financial.
Diversification Opportunities for ChoiceOne Financial and Chemung Financial
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ChoiceOne and Chemung is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ChoiceOne Financial Services 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 ChoiceOne 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 ChoiceOne Financial Services 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 ChoiceOne Financial i.e., ChoiceOne Financial and Chemung Financial go up and down completely randomly.
Pair Corralation between ChoiceOne Financial and Chemung Financial
Given the investment horizon of 90 days ChoiceOne Financial Services is expected to generate 1.8 times more return on investment than Chemung Financial. However, ChoiceOne Financial is 1.8 times more volatile than Chemung Financial Corp. It trades about 0.04 of its potential returns per unit of risk. Chemung Financial Corp is currently generating about 0.02 per unit of risk. If you would invest 2,611 in ChoiceOne Financial Services on September 1, 2024 and sell it today you would earn a total of 1,137 from holding ChoiceOne Financial Services or generate 43.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChoiceOne Financial Services vs. Chemung Financial Corp
Performance |
| Timeline |
| ChoiceOne Financial |
| Chemung Financial Corp |
ChoiceOne Financial and Chemung Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChoiceOne Financial and Chemung Financial
The main advantage of trading using opposite ChoiceOne Financial and Chemung Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChoiceOne Financial 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.| ChoiceOne Financial vs. Home Federal Bancorp | ChoiceOne Financial vs. First Northwest Bancorp | ChoiceOne Financial vs. Lake Shore Bancorp | ChoiceOne Financial vs. Affinity Bancshares |
| Chemung Financial vs. Affinity Bancshares | Chemung Financial vs. Southern California Bancorp | Chemung Financial vs. Auburn National Bancorporation | Chemung Financial vs. BayCom Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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