Correlation Between Western Alliance and Chemung Financial
Can any of the company-specific risk be diversified away by investing in both Western Alliance 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 Western Alliance and Chemung Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Alliance Bancorporation and Chemung Financial Corp, you can compare the effects of market volatilities on Western Alliance 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 Western Alliance with a short position of Chemung Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Alliance and Chemung Financial.
Diversification Opportunities for Western Alliance and Chemung Financial
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Chemung is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Western Alliance Bancorp. 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 Western Alliance 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 Western Alliance Bancorporation 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 Western Alliance i.e., Western Alliance and Chemung Financial go up and down completely randomly.
Pair Corralation between Western Alliance and Chemung Financial
Considering the 90-day investment horizon Western Alliance Bancorporation is expected to generate 1.84 times more return on investment than Chemung Financial. However, Western Alliance is 1.84 times more volatile than Chemung Financial Corp. It trades about 0.18 of its potential returns per unit of risk. Chemung Financial Corp is currently generating about 0.26 per unit of risk. If you would invest 8,297 in Western Alliance Bancorporation on September 2, 2024 and sell it today you would earn a total of 1,064 from holding Western Alliance Bancorporation or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Alliance Bancorp. vs. Chemung Financial Corp
Performance |
| Timeline |
| Western Alliance Ban |
| Chemung Financial Corp |
Western Alliance and Chemung Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Alliance and Chemung Financial
The main advantage of trading using opposite Western Alliance and Chemung Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Alliance 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.| Western Alliance vs. Zions Bancorporation | Western Alliance vs. KeyCorp | Western Alliance vs. First Horizon National | Western Alliance vs. Comerica |
| Chemung Financial vs. Affinity Bancshares | Chemung Financial vs. Auburn National Bancorporation | Chemung Financial vs. First Community | Chemung Financial vs. LINKBANCORP |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |