Correlation Between Citizens Bancshares and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Citizens Bancshares 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 Citizens Bancshares and Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Bancshares Corp and Citizens Financial Corp, you can compare the effects of market volatilities on Citizens Bancshares 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 Citizens Bancshares with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Bancshares and Citizens Financial.
Diversification Opportunities for Citizens Bancshares and Citizens Financial
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citizens and Citizens is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancshares Corp and Citizens Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Corp and Citizens Bancshares 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 Bancshares Corp 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 Corp has no effect on the direction of Citizens Bancshares i.e., Citizens Bancshares and Citizens Financial go up and down completely randomly.
Pair Corralation between Citizens Bancshares and Citizens Financial
Given the investment horizon of 90 days Citizens Bancshares Corp is expected to generate 0.67 times more return on investment than Citizens Financial. However, Citizens Bancshares Corp is 1.49 times less risky than Citizens Financial. It trades about 0.08 of its potential returns per unit of risk. Citizens Financial Corp is currently generating about 0.04 per unit of risk. If you would invest 3,453 in Citizens Bancshares Corp on September 1, 2024 and sell it today you would earn a total of 1,947 from holding Citizens Bancshares Corp or generate 56.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 60.87% |
| Values | Daily Returns |
Citizens Bancshares Corp vs. Citizens Financial Corp
Performance |
| Timeline |
| Citizens Bancshares Corp |
| Citizens Financial Corp |
Citizens Bancshares and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Bancshares and Citizens Financial
The main advantage of trading using opposite Citizens Bancshares and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Bancshares 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.| Citizens Bancshares vs. Harbor Bankshares | Citizens Bancshares vs. BankFirst Capital | Citizens Bancshares vs. Security Federal | Citizens Bancshares vs. MF Bancorp |
| Citizens Financial vs. Century Next Financial | Citizens Financial vs. Triad Business Bank | Citizens Financial vs. First Ottawa Bancshares | Citizens Financial vs. First Community Financial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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