Correlation Between Independence Realty and Citizens Bancorp
Can any of the company-specific risk be diversified away by investing in both Independence Realty 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 Independence Realty and Citizens Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Independence Realty Trust and Citizens Bancorp Investment, you can compare the effects of market volatilities on Independence Realty 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 Independence Realty with a short position of Citizens Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Independence Realty and Citizens Bancorp.
Diversification Opportunities for Independence Realty and Citizens Bancorp
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Independence and Citizens is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Independence Realty Trust 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 Independence Realty 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 Independence Realty Trust 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 Independence Realty i.e., Independence Realty and Citizens Bancorp go up and down completely randomly.
Pair Corralation between Independence Realty and Citizens Bancorp
Considering the 90-day investment horizon Independence Realty Trust is expected to generate 1.14 times more return on investment than Citizens Bancorp. However, Independence Realty is 1.14 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 1,661 in Independence Realty Trust on September 2, 2024 and sell it today you would earn a total of 523.00 from holding Independence Realty Trust or generate 31.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Independence Realty Trust vs. Citizens Bancorp Investment
Performance |
| Timeline |
| Independence Realty Trust |
| Citizens Bancorp Inv |
Independence Realty and Citizens Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Independence Realty and Citizens Bancorp
The main advantage of trading using opposite Independence Realty and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independence Realty 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.| Independence Realty vs. Apartment Investment and | Independence Realty vs. Clipper Realty | Independence Realty vs. BRT Realty Trust | Independence Realty vs. UDR Inc |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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