Correlation Between HMN Financial and Chemung Financial
Can any of the company-specific risk be diversified away by investing in both HMN 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 HMN 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 HMN Financial and Chemung Financial Corp, you can compare the effects of market volatilities on HMN 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 HMN Financial with a short position of Chemung Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Chemung Financial.
Diversification Opportunities for HMN Financial and Chemung Financial
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HMN and Chemung is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial 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 HMN 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 HMN Financial 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 HMN Financial i.e., HMN Financial and Chemung Financial go up and down completely randomly.
Pair Corralation between HMN Financial and Chemung Financial
If you would invest 4,723 in Chemung Financial Corp on August 27, 2024 and sell it today you would earn a total of 523.00 from holding Chemung Financial Corp or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
HMN Financial vs. Chemung Financial Corp
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Chemung Financial Corp |
HMN Financial and Chemung Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Chemung Financial
The main advantage of trading using opposite HMN Financial and Chemung Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN 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.| HMN Financial vs. Magyar Bancorp | HMN Financial vs. Home Federal Bancorp | HMN Financial vs. First Financial Northwest | HMN Financial vs. First Northwest 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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