Correlation Between ChoiceOne Financial and John Marshall

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

By analyzing existing cross correlation between ChoiceOne Financial Services and John Marshall Bancorp, you can compare the effects of market volatilities on ChoiceOne Financial and John Marshall 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 ChoiceOne Financial with a short position of John Marshall. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChoiceOne Financial and John Marshall.

Diversification Opportunities for ChoiceOne Financial and John Marshall

0.92

Correlation Coefficient

ChoiceOne Financial  John Marshall

Almost no diversification

The 3 months correlation between ChoiceOne and John is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding ChoiceOne Financial Services and John Marshall Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Marshall Bancorp and ChoiceOne 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 ChoiceOne Financial Services are associated (or correlated) with John Marshall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Marshall Bancorp has no effect on the direction of ChoiceOne Financial i.e., ChoiceOne Financial and John Marshall go up and down completely randomly.

Pair Corralation between ChoiceOne Financial and John Marshall

Given the investment horizon of 90 days ChoiceOne Financial Services is expected to under-perform the John Marshall. But the stock apears to be less risky and, when comparing its historical volatility, ChoiceOne Financial Services is 1.74 times less risky than John Marshall. The stock trades about -0.25 of its potential returns per unit of risk. The John Marshall Bancorp is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  2,050  in John Marshall Bancorp on December 29, 2024 and sell it today you would lose (338.00) from holding John Marshall Bancorp or give up 16.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

ChoiceOne Financial Services  vs.  John Marshall Bancorp

ChoiceOne Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days ChoiceOne Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

John Marshall Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Marshall Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ChoiceOne Financial and John Marshall

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

The idea behind ChoiceOne Financial Services and John Marshall Bancorp 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.