Correlation Between Community West and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Community West and Citizens 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 Community West and Citizens Financial 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 Financial Services, you can compare the effects of market volatilities on Community West and Citizens 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 Community West with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community West and Citizens Financial.
Diversification Opportunities for Community West and Citizens Financial
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Community and Citizens is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Community West Bancshares and Citizens Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial 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 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial has no effect on the direction of Community West i.e., Community West and Citizens Financial go up and down completely randomly.
Pair Corralation between Community West and Citizens Financial
Given the investment horizon of 90 days Community West is expected to generate 1.14 times less return on investment than Citizens Financial. But when comparing it to its historical volatility, Community West Bancshares is 2.27 times less risky than Citizens Financial. It trades about 0.37 of its potential returns per unit of risk. Citizens Financial Services is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 6,025 in Citizens Financial Services on August 31, 2024 and sell it today you would earn a total of 1,036 from holding Citizens Financial Services or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Community West Bancshares vs. Citizens Financial Services
Performance |
| Timeline |
| Community West Bancshares |
| Citizens Financial |
Community West and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Community West and Citizens Financial
The main advantage of trading using opposite Community West and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community West position performs unexpectedly, Citizens 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 Citizens Financial will offset losses from the drop in Citizens Financial'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 Financial vs. Home Federal Bancorp | Citizens Financial vs. Community West Bancshares | Citizens Financial vs. Magyar Bancorp | Citizens Financial vs. Finward 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |