Correlation Between First Ottawa and Citizens Bancorp
Can any of the company-specific risk be diversified away by investing in both First Ottawa 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 Ottawa 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 Ottawa Bancshares and Citizens Bancorp Investment, you can compare the effects of market volatilities on First Ottawa 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 Ottawa with a short position of Citizens Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ottawa and Citizens Bancorp.
Diversification Opportunities for First Ottawa and Citizens Bancorp
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Citizens is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding First Ottawa Bancshares 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 Ottawa 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 Ottawa Bancshares 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 Ottawa i.e., First Ottawa and Citizens Bancorp go up and down completely randomly.
Pair Corralation between First Ottawa and Citizens Bancorp
Given the investment horizon of 90 days First Ottawa Bancshares is expected to generate 1.11 times more return on investment than Citizens Bancorp. However, First Ottawa is 1.11 times more volatile than Citizens Bancorp Investment. It trades about 0.04 of its potential returns per unit of risk. Citizens Bancorp Investment is currently generating about -0.05 per unit of risk. If you would invest 9,835 in First Ottawa Bancshares on August 26, 2024 and sell it today you would earn a total of 2,166 from holding First Ottawa Bancshares or generate 22.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 70.82% |
| Values | Daily Returns |
First Ottawa Bancshares vs. Citizens Bancorp Investment
Performance |
| Timeline |
| First Ottawa Bancshares |
| Citizens Bancorp Inv |
First Ottawa and Citizens Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ottawa and Citizens Bancorp
The main advantage of trading using opposite First Ottawa and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ottawa 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 Ottawa vs. Century Next Financial | First Ottawa vs. Citizens Financial Corp | First Ottawa vs. Triad Business Bank | First Ottawa vs. First Bankers Trustshares |
| Citizens Bancorp vs. Standard Bank Group | Citizens Bancorp vs. PSB Holdings | Citizens Bancorp vs. United Overseas Bank | Citizens Bancorp vs. Turkiye Garanti Bankasi |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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