Correlation Between Northeast Indiana and Chesapeake Finl

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

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

Diversification Opportunities for Northeast Indiana and Chesapeake Finl

0.0

Correlation Coefficient

Northeast Indiana  Chesapeake Finl

Pay attention - limited upside

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

Pair Corralation between Northeast Indiana and Chesapeake Finl

If you would invest  1,925  in Chesapeake Finl Shs on May 6, 2025 and sell it today you would earn a total of  275.00  from holding Chesapeake Finl Shs or generate 14.29% return on investment over 90 days.

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

Northeast Indiana Bancorp  vs.  Chesapeake Finl Shs

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 current stock price disturbance, may contribute to short-term losses for the investors.

Chesapeake Finl Shs

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chesapeake Finl Shs are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward-looking signals, Chesapeake Finl reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Northeast Indiana and Chesapeake Finl

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

The idea behind Northeast Indiana Bancorp and Chesapeake Finl Shs 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.