Correlation Between BOK Financial and Chemung Financial
Can any of the company-specific risk be diversified away by investing in both BOK 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 BOK 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 BOK Financial and Chemung Financial Corp, you can compare the effects of market volatilities on BOK 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 BOK Financial with a short position of Chemung Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOK Financial and Chemung Financial.
Diversification Opportunities for BOK Financial and Chemung Financial
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BOK and Chemung is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BOK 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 BOK 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 BOK 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 BOK Financial i.e., BOK Financial and Chemung Financial go up and down completely randomly.
Pair Corralation between BOK Financial and Chemung Financial
Given the investment horizon of 90 days BOK Financial is expected to under-perform the Chemung Financial. But the stock apears to be less risky and, when comparing its historical volatility, BOK Financial is 1.69 times less risky than Chemung Financial. The stock trades about -0.09 of its potential returns per unit of risk. The Chemung Financial Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,201 in Chemung Financial Corp on December 2, 2024 and sell it today you would lose (36.00) from holding Chemung Financial Corp or give up 0.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BOK Financial vs. Chemung Financial Corp
Performance |
Timeline |
BOK Financial |
Chemung Financial Corp |
BOK Financial and Chemung Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BOK Financial and Chemung Financial
The main advantage of trading using opposite BOK Financial and Chemung Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOK 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.BOK Financial vs. First Financial Bankshares | BOK Financial vs. Auburn National Bancorporation | BOK Financial vs. Great Southern Bancorp | BOK Financial vs. First Guaranty Bancshares |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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