Correlation Between Merchants Marine and CNB Financial
Can any of the company-specific risk be diversified away by investing in both Merchants Marine and CNB 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 Merchants Marine and CNB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merchants Marine Bancorp and CNB Financial, you can compare the effects of market volatilities on Merchants Marine and CNB 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 Merchants Marine with a short position of CNB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchants Marine and CNB Financial.
Diversification Opportunities for Merchants Marine and CNB Financial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Merchants and CNB is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Merchants Marine Bancorp and CNB Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNB Financial and Merchants Marine 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 Merchants Marine Bancorp are associated (or correlated) with CNB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNB Financial has no effect on the direction of Merchants Marine i.e., Merchants Marine and CNB Financial go up and down completely randomly.
Pair Corralation between Merchants Marine and CNB Financial
Given the investment horizon of 90 days Merchants Marine Bancorp is expected to under-perform the CNB Financial. In addition to that, Merchants Marine is 1.03 times more volatile than CNB Financial. It trades about 0.0 of its total potential returns per unit of risk. CNB Financial is currently generating about 0.06 per unit of volatility. If you would invest 2,029 in CNB Financial on September 14, 2024 and sell it today you would earn a total of 698.00 from holding CNB Financial or generate 34.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 63.2% |
| Values | Daily Returns |
Merchants Marine Bancorp vs. CNB Financial
Performance |
| Timeline |
| Merchants Marine Bancorp |
| CNB Financial |
Merchants Marine and CNB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merchants Marine and CNB Financial
The main advantage of trading using opposite Merchants Marine and CNB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchants Marine position performs unexpectedly, CNB 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 CNB Financial will offset losses from the drop in CNB Financial's long position.| Merchants Marine vs. PT Bank Rakyat | Merchants Marine vs. Morningstar Unconstrained Allocation | Merchants Marine vs. Bondbloxx ETF Trust | Merchants Marine vs. Spring Valley Acquisition |
| CNB Financial vs. Finward Bancorp | CNB Financial vs. Great Southern Bancorp | CNB Financial vs. First Mid Illinois | CNB Financial vs. Franklin Financial Services |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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