Correlation Between First Commonwealth and Citizens Bancorp
Can any of the company-specific risk be diversified away by investing in both First Commonwealth and Citizens 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 First Commonwealth and Citizens Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Commonwealth Financial and Citizens Bancorp Investment, you can compare the effects of market volatilities on First Commonwealth and Citizens 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 First Commonwealth with a short position of Citizens Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Commonwealth and Citizens Bancorp.
Diversification Opportunities for First Commonwealth and Citizens Bancorp
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Citizens is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding First Commonwealth Financial and Citizens Bancorp Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Bancorp Inv and First Commonwealth 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 First Commonwealth Financial are associated (or correlated) with Citizens Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Bancorp Inv has no effect on the direction of First Commonwealth i.e., First Commonwealth and Citizens Bancorp go up and down completely randomly.
Pair Corralation between First Commonwealth and Citizens Bancorp
Considering the 90-day investment horizon First Commonwealth Financial is expected to generate 1.54 times more return on investment than Citizens Bancorp. However, First Commonwealth is 1.54 times more volatile than Citizens Bancorp Investment. It trades about 0.14 of its potential returns per unit of risk. Citizens Bancorp Investment is currently generating about -0.02 per unit of risk. If you would invest 1,305 in First Commonwealth Financial on September 1, 2024 and sell it today you would earn a total of 578.00 from holding First Commonwealth Financial or generate 44.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Commonwealth Financial vs. Citizens Bancorp Investment
Performance |
| Timeline |
| First Commonwealth |
| Citizens Bancorp Inv |
First Commonwealth and Citizens Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Commonwealth and Citizens Bancorp
The main advantage of trading using opposite First Commonwealth and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Commonwealth position performs unexpectedly, Citizens 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 Citizens Bancorp will offset losses from the drop in Citizens Bancorp's long position.| First Commonwealth vs. Great Southern Bancorp | First Commonwealth vs. Heritage Financial | First Commonwealth vs. Finward Bancorp | First Commonwealth vs. QCR Holdings |
| Citizens Bancorp vs. Greenville Federal Financial | Citizens Bancorp vs. First Ottawa Bancshares | Citizens Bancorp vs. Coastal Carolina Bancshares | Citizens Bancorp vs. First Bankers Trustshares |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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