Correlation Between Citizens Financial and Bank of Idaho Holding
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Bank of Idaho Holding 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 Citizens Financial and Bank of Idaho Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Financial Corp and Bank of Idaho, you can compare the effects of market volatilities on Citizens Financial and Bank of Idaho Holding 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 Citizens Financial with a short position of Bank of Idaho Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Bank of Idaho Holding.
Diversification Opportunities for Citizens Financial and Bank of Idaho Holding
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citizens and Bank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Corp and Bank of Idaho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Idaho Holding and Citizens Financial 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 Citizens Financial Corp are associated (or correlated) with Bank of Idaho Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Idaho Holding has no effect on the direction of Citizens Financial i.e., Citizens Financial and Bank of Idaho Holding go up and down completely randomly.
Pair Corralation between Citizens Financial and Bank of Idaho Holding
Given the investment horizon of 90 days Citizens Financial Corp is expected to generate 4.22 times more return on investment than Bank of Idaho Holding. However, Citizens Financial is 4.22 times more volatile than Bank of Idaho. It trades about 0.05 of its potential returns per unit of risk. Bank of Idaho is currently generating about 0.04 per unit of risk. If you would invest 1,855 in Citizens Financial Corp on August 28, 2024 and sell it today you would earn a total of 745.00 from holding Citizens Financial Corp or generate 40.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 68.89% |
| Values | Daily Returns |
Citizens Financial Corp vs. Bank of Idaho
Performance |
| Timeline |
| Citizens Financial Corp |
| Bank of Idaho Holding |
Citizens Financial and Bank of Idaho Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Bank of Idaho Holding
The main advantage of trading using opposite Citizens Financial and Bank of Idaho Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Bank of Idaho Holding 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 Bank of Idaho Holding will offset losses from the drop in Bank of Idaho Holding's long position.| Citizens Financial vs. Century Next Financial | Citizens Financial vs. Triad Business Bank | Citizens Financial vs. First Ottawa Bancshares | Citizens Financial vs. First Community Financial |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |