Correlation Between Camden National and Bar Harbor

Can any of the company-specific risk be diversified away by investing in both Camden National and Bar Harbor 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 Bar Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Camden National and Bar Harbor Bankshares, you can compare the effects of market volatilities on Camden National and Bar Harbor 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 Bar Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camden National and Bar Harbor.

Diversification Opportunities for Camden National and Bar Harbor

0.93

Correlation Coefficient

Camden National  Bar Harbor

Almost no diversification

The 3 months correlation between Camden and Bar is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Camden National and Bar Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bar Harbor Bankshares 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 Bar Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bar Harbor Bankshares has no effect on the direction of Camden National i.e., Camden National and Bar Harbor go up and down completely randomly.

Pair Corralation between Camden National and Bar Harbor

Considering the 90-day investment horizon Camden National is expected to generate 0.88 times more return on investment than Bar Harbor. However, Camden National is 1.14 times less risky than Bar Harbor. It trades about 0.14 of its potential returns per unit of risk. Bar Harbor Bankshares is currently generating about 0.09 per unit of risk. If you would invest  3,843  in Camden National on September 4, 2024 and sell it today you would earn a total of  877.00  from holding Camden National or generate 22.82% return on investment over 90 days.

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

Camden National  vs.  Bar Harbor Bankshares

Camden National

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Camden National are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Camden National exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bar Harbor Bankshares

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bar Harbor Bankshares are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical indicators, Bar Harbor sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Camden National and Bar Harbor

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

The idea behind Camden National and Bar Harbor Bankshares 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.