Correlation Between Citizens Financial and Citizens Bancshares
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Citizens Bancshares 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 Citizens Bancshares 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 Citizens Bancshares Corp, you can compare the effects of market volatilities on Citizens Financial and Citizens Bancshares 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 Citizens Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Citizens Bancshares.
Diversification Opportunities for Citizens Financial and Citizens Bancshares
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citizens and Citizens is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Corp and Citizens Bancshares Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Bancshares Corp 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 Citizens Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Bancshares Corp has no effect on the direction of Citizens Financial i.e., Citizens Financial and Citizens Bancshares go up and down completely randomly.
Pair Corralation between Citizens Financial and Citizens Bancshares
Given the investment horizon of 90 days Citizens Financial Corp is expected to generate 0.84 times more return on investment than Citizens Bancshares. However, Citizens Financial Corp is 1.18 times less risky than Citizens Bancshares. It trades about 0.17 of its potential returns per unit of risk. Citizens Bancshares Corp is currently generating about 0.08 per unit of risk. If you would invest 2,675 in Citizens Financial Corp on November 30, 2024 and sell it today you would earn a total of 225.00 from holding Citizens Financial Corp or generate 8.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.5% |
| Values | Daily Returns |
Citizens Financial Corp vs. Citizens Bancshares Corp
Performance |
| Timeline |
| Citizens Financial Corp |
| Citizens Bancshares Corp |
Citizens Financial and Citizens Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Citizens Bancshares
The main advantage of trading using opposite Citizens Financial and Citizens Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Citizens Bancshares 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 Bancshares will offset losses from the drop in Citizens Bancshares' 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 |
| Citizens Bancshares vs. Harbor Bankshares | Citizens Bancshares vs. BankFirst Capital | Citizens Bancshares vs. Security Federal | Citizens Bancshares vs. MF Bancorp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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