Correlation Between Citizens Holding and Northway Financial
Can any of the company-specific risk be diversified away by investing in both Citizens Holding and Northway Financial 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 Northway Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Holding and Northway Financial, you can compare the effects of market volatilities on Citizens Holding and Northway Financial 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 Northway Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Holding and Northway Financial.
Diversification Opportunities for Citizens Holding and Northway Financial
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citizens and Northway is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Holding and Northway Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northway Financial 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 Northway Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northway Financial has no effect on the direction of Citizens Holding i.e., Citizens Holding and Northway Financial go up and down completely randomly.
Pair Corralation between Citizens Holding and Northway Financial
If you would invest 1,915 in Northway Financial on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Northway Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Holding vs. Northway Financial
Performance |
| Timeline |
| Citizens Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Northway Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citizens Holding and Northway Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Holding and Northway Financial
The main advantage of trading using opposite Citizens Holding and Northway Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Holding position performs unexpectedly, Northway Financial 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 Northway Financial will offset losses from the drop in Northway Financial's 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 |
| Northway Financial vs. Katahdin Bankshares Corp | Northway Financial vs. First Northern Community | Northway Financial vs. Pacific Financial Corp | Northway Financial vs. QNB Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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