Correlation Between Community West and Citizens Holding
Can any of the company-specific risk be diversified away by investing in both Community West and Citizens Holding 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 Community West and Citizens Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Community West Bancshares and Citizens Holding, you can compare the effects of market volatilities on Community West and Citizens Holding 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 Community West with a short position of Citizens Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community West and Citizens Holding.
Diversification Opportunities for Community West and Citizens Holding
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Community and Citizens is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Community West Bancshares and Citizens Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Holding and Community West 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 Community West Bancshares are associated (or correlated) with Citizens Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Holding has no effect on the direction of Community West i.e., Community West and Citizens Holding go up and down completely randomly.
Pair Corralation between Community West and Citizens Holding
If you would invest 1,861 in Community West Bancshares on August 27, 2024 and sell it today you would earn a total of 321.00 from holding Community West Bancshares or generate 17.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Community West Bancshares vs. Citizens Holding
Performance |
| Timeline |
| Community West Bancshares |
| Citizens Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Community West and Citizens Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Community West and Citizens Holding
The main advantage of trading using opposite Community West and Citizens Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community West position performs unexpectedly, Citizens Holding 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 Holding will offset losses from the drop in Citizens Holding's long position.| Community West vs. Home Federal Bancorp | Community West vs. Magyar Bancorp | Community West vs. First Northwest Bancorp | Community West vs. First Financial Northwest |
| Citizens Holding vs. Home Federal Bancorp | Citizens Holding vs. Lake Shore Bancorp | Citizens Holding vs. Community West Bancshares | Citizens Holding vs. Magyar 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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