Correlation Between Citizens Bancshares and Heartland Banccorp
Can any of the company-specific risk be diversified away by investing in both Citizens Bancshares and Heartland Banccorp 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 Heartland Banccorp 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 Heartland Banccorp, you can compare the effects of market volatilities on Citizens Bancshares and Heartland Banccorp 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 Heartland Banccorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Bancshares and Heartland Banccorp.
Diversification Opportunities for Citizens Bancshares and Heartland Banccorp
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citizens and Heartland is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancshares Corp and Heartland Banccorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Banccorp 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 Heartland Banccorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Banccorp has no effect on the direction of Citizens Bancshares i.e., Citizens Bancshares and Heartland Banccorp go up and down completely randomly.
Pair Corralation between Citizens Bancshares and Heartland Banccorp
Given the investment horizon of 90 days Citizens Bancshares is expected to generate 3.5 times less return on investment than Heartland Banccorp. But when comparing it to its historical volatility, Citizens Bancshares Corp is 1.33 times less risky than Heartland Banccorp. It trades about 0.08 of its potential returns per unit of risk. Heartland Banccorp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 14,800 in Heartland Banccorp on August 28, 2024 and sell it today you would earn a total of 2,000 from holding Heartland Banccorp or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Bancshares Corp vs. Heartland Banccorp
Performance |
| Timeline |
| Citizens Bancshares Corp |
| Heartland Banccorp |
Citizens Bancshares and Heartland Banccorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Bancshares and Heartland Banccorp
The main advantage of trading using opposite Citizens Bancshares and Heartland Banccorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Bancshares position performs unexpectedly, Heartland Banccorp 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 Heartland Banccorp will offset losses from the drop in Heartland Banccorp's long position.| Citizens Bancshares vs. Harbor Bankshares | Citizens Bancshares vs. BankFirst Capital | Citizens Bancshares vs. Security Federal | Citizens Bancshares vs. MF Bancorp |
| Heartland Banccorp vs. Invesco High Income | Heartland Banccorp vs. Blackrock Muniholdings Ny | Heartland Banccorp vs. MFS Investment Grade | Heartland Banccorp vs. Federated Premier Municipal |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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