Correlation Between Cullman Bancorp and Citizens Bancorp
Can any of the company-specific risk be diversified away by investing in both Cullman Bancorp and Citizens Bancorp 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 Cullman Bancorp and Citizens Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullman Bancorp and Citizens Bancorp Investment, you can compare the effects of market volatilities on Cullman Bancorp and Citizens Bancorp 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 Cullman Bancorp with a short position of Citizens Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullman Bancorp and Citizens Bancorp.
Diversification Opportunities for Cullman Bancorp and Citizens Bancorp
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cullman and Citizens is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Cullman Bancorp and Citizens Bancorp Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Bancorp Inv and Cullman Bancorp 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 Cullman Bancorp are associated (or correlated) with Citizens Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Bancorp Inv has no effect on the direction of Cullman Bancorp i.e., Cullman Bancorp and Citizens Bancorp go up and down completely randomly.
Pair Corralation between Cullman Bancorp and Citizens Bancorp
Given the investment horizon of 90 days Cullman Bancorp is expected to generate 0.82 times more return on investment than Citizens Bancorp. However, Cullman Bancorp is 1.22 times less risky than Citizens Bancorp. It trades about -0.02 of its potential returns per unit of risk. Citizens Bancorp Investment is currently generating about -0.05 per unit of risk. If you would invest 1,106 in Cullman Bancorp on September 3, 2024 and sell it today you would lose (135.00) from holding Cullman Bancorp or give up 12.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.99% |
| Values | Daily Returns |
Cullman Bancorp vs. Citizens Bancorp Investment
Performance |
| Timeline |
| Cullman Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Citizens Bancorp Inv |
Cullman Bancorp and Citizens Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullman Bancorp and Citizens Bancorp
The main advantage of trading using opposite Cullman Bancorp and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullman Bancorp position performs unexpectedly, Citizens Bancorp 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 Bancorp will offset losses from the drop in Citizens Bancorp's long position.| Cullman Bancorp vs. Home Federal Bancorp | Cullman Bancorp vs. Lake Shore Bancorp | Cullman Bancorp vs. Community West Bancshares | Cullman Bancorp vs. Magyar Bancorp |
| Citizens Bancorp vs. Greenville Federal Financial | Citizens Bancorp vs. First Ottawa Bancshares | Citizens Bancorp vs. Coastal Carolina Bancshares | Citizens Bancorp vs. First Bankers Trustshares |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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