Correlation Between Chemung Financial and American National

Can any of the company-specific risk be diversified away by investing in both Chemung Financial and American National 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 Chemung Financial and American National into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chemung Financial Corp and American National Bankshares, you can compare the effects of market volatilities on Chemung Financial and American National 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 Chemung Financial with a short position of American National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemung Financial and American National.

Diversification Opportunities for Chemung Financial and American National

0.0

Correlation Coefficient

Chemung Financial  American National

Pay attention - limited upside

The 3 months correlation between Chemung and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chemung Financial Corp and American National Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American National and Chemung 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 Chemung Financial Corp are associated (or correlated) with American National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American National has no effect on the direction of Chemung Financial i.e., Chemung Financial and American National go up and down completely randomly.

Pair Corralation between Chemung Financial and American National

If you would invest (100.00) in American National Bankshares on December 29, 2024 and sell it today you would earn a total of  100.00  from holding American National Bankshares or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Chemung Financial Corp  vs.  American National Bankshares

Chemung Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chemung Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Chemung Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

American National

Risk-Adjusted Performance

Very Weak

Over the last 90 days American National Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, American National is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chemung Financial and American National

The main advantage of trading using opposite Chemung Financial and American National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemung Financial position performs unexpectedly, American National 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 American National will offset losses from the drop in American National's long position.

The idea behind Chemung Financial Corp and American National Bankshares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.