Correlation Between First Community and Chemung Financial
Can any of the company-specific risk be diversified away by investing in both First Community 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 First Community and Chemung Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Community and Chemung Financial Corp, you can compare the effects of market volatilities on First Community 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 First Community with a short position of Chemung Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Community and Chemung Financial.
Diversification Opportunities for First Community and Chemung Financial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Chemung is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding First Community 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 First Community 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 First Community 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 First Community i.e., First Community and Chemung Financial go up and down completely randomly.
Pair Corralation between First Community and Chemung Financial
Given the investment horizon of 90 days First Community is expected to generate 1.01 times less return on investment than Chemung Financial. But when comparing it to its historical volatility, First Community is 1.07 times less risky than Chemung Financial. It trades about 0.19 of its potential returns per unit of risk. Chemung Financial Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,718 in Chemung Financial Corp on August 24, 2024 and sell it today you would earn a total of 346.00 from holding Chemung Financial Corp or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
First Community vs. Chemung Financial Corp
Performance |
| Timeline |
| First Community |
| Chemung Financial Corp |
First Community and Chemung Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Community and Chemung Financial
The main advantage of trading using opposite First Community and Chemung Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Community 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.| First Community vs. Community West Bancshares | First Community vs. First Financial Northwest | First Community vs. First Northwest Bancorp | First Community vs. Home Federal 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |