Correlation Between Main Street and Chemung Financial
Can any of the company-specific risk be diversified away by investing in both Main Street 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 Main Street and Chemung Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Street Financial and Chemung Financial Corp, you can compare the effects of market volatilities on Main Street 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 Main Street with a short position of Chemung Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Street and Chemung Financial.
Diversification Opportunities for Main Street and Chemung Financial
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Main and Chemung is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Main Street 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 Main Street 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 Main Street 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 Main Street i.e., Main Street and Chemung Financial go up and down completely randomly.
Pair Corralation between Main Street and Chemung Financial
Given the investment horizon of 90 days Main Street Financial is expected to under-perform the Chemung Financial. But the otc stock apears to be less risky and, when comparing its historical volatility, Main Street Financial is 4.25 times less risky than Chemung Financial. The otc stock trades about -0.2 of its potential returns per unit of risk. The Chemung Financial Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,672 in Chemung Financial Corp on November 27, 2024 and sell it today you would earn a total of 436.00 from holding Chemung Financial Corp or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Main Street Financial vs. Chemung Financial Corp
Performance |
| Timeline |
| Main Street Financial |
| Chemung Financial Corp |
Main Street and Chemung Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Street and Chemung Financial
The main advantage of trading using opposite Main Street and Chemung Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Street 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.| Main Street vs. CCFNB Bancorp | Main Street vs. Burke Herbert Financial | Main Street vs. First IC | Main Street vs. Enterprise Financial Services |
| 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |