Correlation Between Chemung Financial and Greenville Federal

Can any of the company-specific risk be diversified away by investing in both Chemung Financial and Greenville Federal 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 Greenville Federal 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 Greenville Federal Financial, you can compare the effects of market volatilities on Chemung Financial and Greenville Federal 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 Greenville Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemung Financial and Greenville Federal.

Diversification Opportunities for Chemung Financial and Greenville Federal

-0.72

Correlation Coefficient

Chemung Financial  Greenville Federal

Pay attention - limited upside

The 3 months correlation between Chemung and Greenville is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chemung Financial Corp and Greenville Federal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenville Federal 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 Greenville Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenville Federal has no effect on the direction of Chemung Financial i.e., Chemung Financial and Greenville Federal go up and down completely randomly.

Pair Corralation between Chemung Financial and Greenville Federal

Given the investment horizon of 90 days Chemung Financial Corp is expected to generate 1.42 times more return on investment than Greenville Federal. However, Chemung Financial is 1.42 times more volatile than Greenville Federal Financial. It trades about 0.07 of its potential returns per unit of risk. Greenville Federal Financial is currently generating about -0.03 per unit of risk. If you would invest  4,799  in Chemung Financial Corp on September 21, 2024 and sell it today you would earn a total of  286.00  from holding Chemung Financial Corp or generate 5.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Chemung Financial Corp  vs.  Greenville Federal Financial

Chemung Financial Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chemung Financial Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady primary indicators, Chemung Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Greenville Federal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Chemung Financial and Greenville Federal

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

The idea behind Chemung Financial Corp and Greenville Federal Financial 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.