Correlation Between First Mid and Chemung Financial
Can any of the company-specific risk be diversified away by investing in both First Mid 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 Mid 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 Mid Illinois and Chemung Financial Corp, you can compare the effects of market volatilities on First Mid 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 Mid with a short position of Chemung Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Mid and Chemung Financial.
Diversification Opportunities for First Mid and Chemung Financial
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Chemung is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding First Mid Illinois 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 Mid 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 Mid Illinois 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 Mid i.e., First Mid and Chemung Financial go up and down completely randomly.
Pair Corralation between First Mid and Chemung Financial
Given the investment horizon of 90 days First Mid is expected to generate 1.84 times less return on investment than Chemung Financial. But when comparing it to its historical volatility, First Mid Illinois is 2.14 times less risky than Chemung Financial. It trades about 0.1 of its potential returns per unit of risk. Chemung Financial Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,881 in Chemung Financial Corp on November 1, 2024 and sell it today you would earn a total of 260.00 from holding Chemung Financial Corp or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Mid Illinois vs. Chemung Financial Corp
Performance |
| Timeline |
| First Mid Illinois |
| Chemung Financial Corp |
First Mid and Chemung Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Mid and Chemung Financial
The main advantage of trading using opposite First Mid and Chemung Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Mid 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 Mid vs. Finward Bancorp | First Mid vs. Great Southern Bancorp | First Mid vs. Franklin Financial Services | First Mid vs. Community West Bancshares |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |