Correlation Between Chesapeake Finl and Northeast Indiana
Can any of the company-specific risk be diversified away by investing in both Chesapeake Finl and Northeast Indiana 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 Chesapeake Finl and Northeast Indiana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Finl Shs and Northeast Indiana Bancorp, you can compare the effects of market volatilities on Chesapeake Finl and Northeast Indiana 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 Chesapeake Finl with a short position of Northeast Indiana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Finl and Northeast Indiana.
Diversification Opportunities for Chesapeake Finl and Northeast Indiana
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chesapeake and Northeast is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Finl Shs and Northeast Indiana Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northeast Indiana Bancorp and Chesapeake Finl 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 Chesapeake Finl Shs are associated (or correlated) with Northeast Indiana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northeast Indiana Bancorp has no effect on the direction of Chesapeake Finl i.e., Chesapeake Finl and Northeast Indiana go up and down completely randomly.
Pair Corralation between Chesapeake Finl and Northeast Indiana
Given the investment horizon of 90 days Chesapeake Finl is expected to generate 339.93 times less return on investment than Northeast Indiana. But when comparing it to its historical volatility, Chesapeake Finl Shs is 16.05 times less risky than Northeast Indiana. It trades about 0.01 of its potential returns per unit of risk. Northeast Indiana Bancorp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,640 in Northeast Indiana Bancorp on August 29, 2024 and sell it today you would lose (2,459) from holding Northeast Indiana Bancorp or give up 53.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 37.77% |
| Values | Daily Returns |
Chesapeake Finl Shs vs. Northeast Indiana Bancorp
Performance |
| Timeline |
| Chesapeake Finl Shs |
| Northeast Indiana Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chesapeake Finl and Northeast Indiana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Finl and Northeast Indiana
The main advantage of trading using opposite Chesapeake Finl and Northeast Indiana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Finl position performs unexpectedly, Northeast Indiana 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 Northeast Indiana will offset losses from the drop in Northeast Indiana's long position.| Chesapeake Finl vs. Invesco High Income | Chesapeake Finl vs. Blackrock Muniholdings Ny | Chesapeake Finl vs. MFS Investment Grade | Chesapeake Finl vs. Federated Premier Municipal |
| Northeast Indiana vs. PSB Holdings | Northeast Indiana vs. Chesapeake Finl Shs | Northeast Indiana vs. Eagle Financial Services | Northeast Indiana vs. CCFNB 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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