Correlation Between Citizens Bancshares and Harbor Bankshares
Can any of the company-specific risk be diversified away by investing in both Citizens Bancshares and Harbor Bankshares 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 Harbor Bankshares 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 Harbor Bankshares, you can compare the effects of market volatilities on Citizens Bancshares and Harbor Bankshares 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 Harbor Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Bancshares and Harbor Bankshares.
Diversification Opportunities for Citizens Bancshares and Harbor Bankshares
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citizens and Harbor is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancshares Corp and Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Bankshares 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 Harbor Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Bankshares has no effect on the direction of Citizens Bancshares i.e., Citizens Bancshares and Harbor Bankshares go up and down completely randomly.
Pair Corralation between Citizens Bancshares and Harbor Bankshares
Given the investment horizon of 90 days Citizens Bancshares is expected to generate 4.39 times less return on investment than Harbor Bankshares. But when comparing it to its historical volatility, Citizens Bancshares Corp is 1.12 times less risky than Harbor Bankshares. It trades about 0.08 of its potential returns per unit of risk. Harbor Bankshares is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,215 in Harbor Bankshares on August 28, 2024 and sell it today you would earn a total of 217.00 from holding Harbor Bankshares or generate 17.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Bancshares Corp vs. Harbor Bankshares
Performance |
| Timeline |
| Citizens Bancshares Corp |
| Harbor Bankshares |
Citizens Bancshares and Harbor Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Bancshares and Harbor Bankshares
The main advantage of trading using opposite Citizens Bancshares and Harbor Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Bancshares position performs unexpectedly, Harbor Bankshares 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 Harbor Bankshares will offset losses from the drop in Harbor Bankshares' long position.| Citizens Bancshares vs. Harbor Bankshares | Citizens Bancshares vs. BankFirst Capital | Citizens Bancshares vs. Security Federal | Citizens Bancshares vs. MF 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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