Correlation Between Citizens Holding and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Citizens Holding and Dow Jones 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 Holding and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Holding and Dow Jones Industrial, you can compare the effects of market volatilities on Citizens Holding and Dow Jones 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 Holding with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Holding and Dow Jones.
Diversification Opportunities for Citizens Holding and Dow Jones
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citizens and Dow is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Holding and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Citizens Holding 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 Holding are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Citizens Holding i.e., Citizens Holding and Dow Jones go up and down completely randomly.
Pair Corralation between Citizens Holding and Dow Jones
Given the investment horizon of 90 days Citizens Holding is expected to under-perform the Dow Jones. In addition to that, Citizens Holding is 3.2 times more volatile than Dow Jones Industrial. It trades about -0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,359,792 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 1,113,865 from holding Dow Jones Industrial or generate 33.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.65% |
| Values | Daily Returns |
Citizens Holding vs. Dow Jones Industrial
Performance |
| Timeline |
Citizens Holding and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Citizens Holding
Pair trading matchups for Citizens Holding
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Citizens Holding and Dow Jones
The main advantage of trading using opposite Citizens Holding and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Holding position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Citizens Holding vs. Home Federal Bancorp | Citizens Holding vs. Lake Shore Bancorp | Citizens Holding vs. Community West Bancshares | Citizens Holding vs. Magyar Bancorp |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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