Correlation Between Citizens Bancshares and MF Bancorp
Can any of the company-specific risk be diversified away by investing in both Citizens Bancshares and MF Bancorp 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 MF Bancorp 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 MF Bancorp, you can compare the effects of market volatilities on Citizens Bancshares and MF Bancorp 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 MF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Bancshares and MF Bancorp.
Diversification Opportunities for Citizens Bancshares and MF Bancorp
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citizens and MFBP is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancshares Corp and MF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MF Bancorp 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 MF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MF Bancorp has no effect on the direction of Citizens Bancshares i.e., Citizens Bancshares and MF Bancorp go up and down completely randomly.
Pair Corralation between Citizens Bancshares and MF Bancorp
Given the investment horizon of 90 days Citizens Bancshares Corp is expected to under-perform the MF Bancorp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Citizens Bancshares Corp is 3.39 times less risky than MF Bancorp. The pink sheet trades about -0.12 of its potential returns per unit of risk. The MF Bancorp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,900 in MF Bancorp on November 2, 2024 and sell it today you would earn a total of 100.00 from holding MF Bancorp or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Bancshares Corp vs. MF Bancorp
Performance |
| Timeline |
| Citizens Bancshares Corp |
| MF Bancorp |
Citizens Bancshares and MF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Bancshares and MF Bancorp
The main advantage of trading using opposite Citizens Bancshares and MF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Bancshares position performs unexpectedly, MF Bancorp 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 MF Bancorp will offset losses from the drop in MF Bancorp's long position.| Citizens Bancshares vs. DTF Tax Free | Citizens Bancshares vs. MFS Investment Grade | Citizens Bancshares vs. Nuveen California Select | Citizens Bancshares vs. Federated Premier Municipal |
| MF Bancorp vs. Citizens Bancshares Corp | MF Bancorp vs. Harbor Bankshares | MF Bancorp vs. United Bancorporation of | MF Bancorp vs. KS 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.
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