Correlation Between Merchants Marine and Citizens Bancshares
Can any of the company-specific risk be diversified away by investing in both Merchants Marine and Citizens Bancshares 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 Merchants Marine and Citizens Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merchants Marine Bancorp and Citizens Bancshares Corp, you can compare the effects of market volatilities on Merchants Marine and Citizens Bancshares 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 Merchants Marine with a short position of Citizens Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merchants Marine and Citizens Bancshares.
Diversification Opportunities for Merchants Marine and Citizens Bancshares
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Merchants and Citizens is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Merchants Marine Bancorp and Citizens Bancshares Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Bancshares Corp and Merchants Marine 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 Merchants Marine Bancorp are associated (or correlated) with Citizens Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Bancshares Corp has no effect on the direction of Merchants Marine i.e., Merchants Marine and Citizens Bancshares go up and down completely randomly.
Pair Corralation between Merchants Marine and Citizens Bancshares
Given the investment horizon of 90 days Merchants Marine is expected to generate 42.7 times less return on investment than Citizens Bancshares. But when comparing it to its historical volatility, Merchants Marine Bancorp is 1.26 times less risky than Citizens Bancshares. It trades about 0.0 of its potential returns per unit of risk. Citizens Bancshares Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,850 in Citizens Bancshares Corp on September 3, 2024 and sell it today you would earn a total of 550.00 from holding Citizens Bancshares Corp or generate 11.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merchants Marine Bancorp vs. Citizens Bancshares Corp
Performance |
| Timeline |
| Merchants Marine Bancorp |
| Citizens Bancshares Corp |
Merchants Marine and Citizens Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merchants Marine and Citizens Bancshares
The main advantage of trading using opposite Merchants Marine and Citizens Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merchants Marine position performs unexpectedly, Citizens Bancshares 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 Bancshares will offset losses from the drop in Citizens Bancshares' long position.| Merchants Marine vs. Mission Valley Bancorp | Merchants Marine vs. Harbor Bankshares | Merchants Marine vs. Oconee Financial | Merchants Marine vs. MF Bancorp |
| Citizens Bancshares vs. Western Asset Global | Citizens Bancshares vs. Invesco Trust For | Citizens Bancshares vs. Logan Ridge Finance | Citizens Bancshares vs. Invesco Advantage MIT |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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