Correlation Between Citizens Financial and First Community
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and First Community 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 First Community 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 First Community Financial, you can compare the effects of market volatilities on Citizens Financial and First Community 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 First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and First Community.
Diversification Opportunities for Citizens Financial and First Community
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citizens and First is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Corp and First Community Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community Financial 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 First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community Financial has no effect on the direction of Citizens Financial i.e., Citizens Financial and First Community go up and down completely randomly.
Pair Corralation between Citizens Financial and First Community
Given the investment horizon of 90 days Citizens Financial Corp is expected to generate 2.13 times more return on investment than First Community. However, Citizens Financial is 2.13 times more volatile than First Community Financial. It trades about 0.05 of its potential returns per unit of risk. First Community Financial is currently generating about -0.07 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 Against |
| Strength | Significant |
| Accuracy | 68.89% |
| Values | Daily Returns |
Citizens Financial Corp vs. First Community Financial
Performance |
| Timeline |
| Citizens Financial Corp |
| First Community Financial |
Citizens Financial and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and First Community
The main advantage of trading using opposite Citizens Financial and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, First Community 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 First Community will offset losses from the drop in First Community'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 |
| First Community vs. CCSB Financial Corp | First Community vs. Bank of Utica | First Community vs. BEO Bancorp | First Community vs. First Community |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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