Correlation Between Chesapeake Finl and Northeast Indiana

Can any of the company-specific risk be diversified away by investing in both Chesapeake Finl and Northeast Indiana 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 Chesapeake Finl and Northeast Indiana into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chesapeake Finl Shs and Northeast Indiana Bancorp, you can compare the effects of market volatilities on Chesapeake Finl and Northeast Indiana 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 Chesapeake Finl with a short position of Northeast Indiana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Finl and Northeast Indiana.

Diversification Opportunities for Chesapeake Finl and Northeast Indiana

0.0

Correlation Coefficient

Chesapeake Finl  Northeast Indiana

Pay attention - limited upside

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

Pair Corralation between Chesapeake Finl and Northeast Indiana

If you would invest  1,870  in Chesapeake Finl Shs on December 30, 2024 and sell it today you would earn a total of  105.00  from holding Chesapeake Finl Shs or generate 5.61% return on investment over 90 days.

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

Chesapeake Finl Shs  vs.  Northeast Indiana Bancorp

Chesapeake Finl Shs

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chesapeake Finl Shs are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking signals, Chesapeake Finl is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Northeast Indiana Bancorp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Chesapeake Finl and Northeast Indiana

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

The idea behind Chesapeake Finl Shs and Northeast Indiana 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.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.