Correlation Between Franklin Financial and Chemung Financial
Can any of the company-specific risk be diversified away by investing in both Franklin 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 Franklin 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 Franklin Financial Services and Chemung Financial Corp, you can compare the effects of market volatilities on Franklin 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 Franklin Financial with a short position of Chemung Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Financial and Chemung Financial.
Diversification Opportunities for Franklin Financial and Chemung Financial
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Chemung is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Franklin 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 Franklin 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 Franklin 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 Franklin Financial i.e., Franklin Financial and Chemung Financial go up and down completely randomly.
Pair Corralation between Franklin Financial and Chemung Financial
Given the investment horizon of 90 days Franklin Financial Services is expected to generate 0.66 times more return on investment than Chemung Financial. However, Franklin Financial Services is 1.52 times less risky than Chemung Financial. It trades about 0.27 of its potential returns per unit of risk. Chemung Financial Corp is currently generating about 0.09 per unit of risk. If you would invest 2,990 in Franklin Financial Services on November 1, 2024 and sell it today you would earn a total of 402.00 from holding Franklin Financial Services or generate 13.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Financial Services vs. Chemung Financial Corp
Performance |
| Timeline |
| Franklin Financial |
| Chemung Financial Corp |
Franklin Financial and Chemung Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Financial and Chemung Financial
The main advantage of trading using opposite Franklin Financial and Chemung Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin 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.| Franklin Financial vs. Magyar Bancorp | Franklin Financial vs. Affinity Bancshares | Franklin Financial vs. Home Federal Bancorp | Franklin Financial vs. Sound Financial 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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