Correlation Between Cars and Citizens Bancorp
Can any of the company-specific risk be diversified away by investing in both Cars and Citizens Bancorp 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 Cars and Citizens Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cars Inc and Citizens Bancorp Investment, you can compare the effects of market volatilities on Cars and Citizens Bancorp 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 Cars with a short position of Citizens Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and Citizens Bancorp.
Diversification Opportunities for Cars and Citizens Bancorp
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cars and Citizens is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and Citizens Bancorp Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Bancorp Inv and Cars 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 Cars Inc are associated (or correlated) with Citizens Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Bancorp Inv has no effect on the direction of Cars i.e., Cars and Citizens Bancorp go up and down completely randomly.
Pair Corralation between Cars and Citizens Bancorp
Given the investment horizon of 90 days Cars is expected to generate 177.83 times less return on investment than Citizens Bancorp. In addition to that, Cars is 1.04 times more volatile than Citizens Bancorp Investment. It trades about 0.0 of its total potential returns per unit of risk. Citizens Bancorp Investment is currently generating about 0.42 per unit of volatility. If you would invest 2,200 in Citizens Bancorp Investment on September 12, 2024 and sell it today you would earn a total of 355.00 from holding Citizens Bancorp Investment or generate 16.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cars Inc vs. Citizens Bancorp Investment
Performance |
| Timeline |
| Cars Inc |
| Citizens Bancorp Inv |
Cars and Citizens Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and Citizens Bancorp
The main advantage of trading using opposite Cars and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars position performs unexpectedly, Citizens Bancorp 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 Citizens Bancorp will offset losses from the drop in Citizens Bancorp's long position.| Cars vs. Group 1 Automotive | Cars vs. KAR Auction Services | Cars vs. CarMax Inc | Cars vs. Rush Enterprises A |
| Citizens Bancorp vs. PT Bank Rakyat | Citizens Bancorp vs. Morningstar Unconstrained Allocation | Citizens Bancorp vs. Bondbloxx ETF Trust | Citizens Bancorp vs. Spring Valley Acquisition |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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