Correlation Between Norwood Financial and Citizens Bancorp
Can any of the company-specific risk be diversified away by investing in both Norwood Financial 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 Norwood Financial and Citizens Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norwood Financial Corp and Citizens Bancorp Investment, you can compare the effects of market volatilities on Norwood Financial 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 Norwood Financial with a short position of Citizens Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwood Financial and Citizens Bancorp.
Diversification Opportunities for Norwood Financial and Citizens Bancorp
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Norwood and Citizens is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Norwood Financial Corp 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 Norwood Financial 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 Norwood Financial Corp 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 Norwood Financial i.e., Norwood Financial and Citizens Bancorp go up and down completely randomly.
Pair Corralation between Norwood Financial and Citizens Bancorp
Given the investment horizon of 90 days Norwood Financial Corp is expected to under-perform the Citizens Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Norwood Financial Corp is 1.3 times less risky than Citizens Bancorp. The stock trades about -0.07 of its potential returns per unit of risk. The Citizens Bancorp Investment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,881 in Citizens Bancorp Investment on November 27, 2024 and sell it today you would earn a total of 19.00 from holding Citizens Bancorp Investment or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwood Financial Corp vs. Citizens Bancorp Investment
Performance |
| Timeline |
| Norwood Financial Corp |
| Citizens Bancorp Inv |
Norwood Financial and Citizens Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwood Financial and Citizens Bancorp
The main advantage of trading using opposite Norwood Financial and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwood Financial 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.| Norwood Financial vs. Chemung Financial Corp | Norwood Financial vs. Home Federal Bancorp | Norwood Financial vs. Rhinebeck Bancorp | Norwood Financial vs. Finward Bancorp |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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