Correlation Between Camden National and First United
Can any of the company-specific risk be diversified away by investing in both Camden National and First United 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 Camden National and First United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camden National and First United, you can compare the effects of market volatilities on Camden National and First United 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 Camden National with a short position of First United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camden National and First United.
Diversification Opportunities for Camden National and First United
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Camden and First is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Camden National and First United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First United and Camden National 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 Camden National are associated (or correlated) with First United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First United has no effect on the direction of Camden National i.e., Camden National and First United go up and down completely randomly.
Pair Corralation between Camden National and First United
Considering the 90-day investment horizon Camden National is expected to generate 5.77 times more return on investment than First United. However, Camden National is 5.77 times more volatile than First United. It trades about 0.1 of its potential returns per unit of risk. First United is currently generating about 0.13 per unit of risk. If you would invest 3,062 in Camden National on February 4, 2024 and sell it today you would earn a total of 141.00 from holding Camden National or generate 4.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Camden National vs. First United
Performance |
Timeline |
Camden National |
First United |
Camden National and First United Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Camden National and First United
The main advantage of trading using opposite Camden National and First United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camden National position performs unexpectedly, First United 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 First United will offset losses from the drop in First United's long position.Camden National vs. Axos Financial | Camden National vs. KB Financial Group | Camden National vs. Nu Holdings | Camden National vs. Woori Financial Group |
First United vs. Axos Financial | First United vs. KB Financial Group | First United vs. Nu Holdings | First United vs. Woori Financial Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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