Correlation Between Madison County and CIB Marine
Can any of the company-specific risk be diversified away by investing in both Madison County and CIB Marine 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 Madison County and CIB Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Madison County Financial and CIB Marine Bancshares, you can compare the effects of market volatilities on Madison County and CIB Marine 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 Madison County with a short position of CIB Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madison County and CIB Marine.
Diversification Opportunities for Madison County and CIB Marine
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Madison and CIB is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Madison County Financial and CIB Marine Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIB Marine Bancshares and Madison County 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 Madison County Financial are associated (or correlated) with CIB Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIB Marine Bancshares has no effect on the direction of Madison County i.e., Madison County and CIB Marine go up and down completely randomly.
Pair Corralation between Madison County and CIB Marine
If you would invest 2,405 in CIB Marine Bancshares on August 31, 2024 and sell it today you would earn a total of 491.00 from holding CIB Marine Bancshares or generate 20.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.27% |
| Values | Daily Returns |
Madison County Financial vs. CIB Marine Bancshares
Performance |
| Timeline |
| Madison County Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CIB Marine Bancshares |
Madison County and CIB Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Madison County and CIB Marine
The main advantage of trading using opposite Madison County and CIB Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madison County position performs unexpectedly, CIB Marine 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 CIB Marine will offset losses from the drop in CIB Marine's long position.| Madison County vs. Bank of San | Madison County vs. Citizens Bancorp of | Madison County vs. First Ottawa Bancshares | Madison County vs. Mountain Commerce Bancorp |
| CIB Marine vs. U I Financial | CIB Marine vs. Heartland Banccorp | CIB Marine vs. United Bancorporation of | CIB Marine vs. Harbor Bankshares |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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