Correlation Between Parke Bancorp and Citizens Bancorp
Can any of the company-specific risk be diversified away by investing in both Parke Bancorp 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 Parke Bancorp and Citizens Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parke Bancorp and Citizens Bancorp Investment, you can compare the effects of market volatilities on Parke Bancorp 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 Parke Bancorp with a short position of Citizens Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parke Bancorp and Citizens Bancorp.
Diversification Opportunities for Parke Bancorp and Citizens Bancorp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Parke and Citizens is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Parke Bancorp 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 Parke Bancorp 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 Parke Bancorp 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 Parke Bancorp i.e., Parke Bancorp and Citizens Bancorp go up and down completely randomly.
Pair Corralation between Parke Bancorp and Citizens Bancorp
Given the investment horizon of 90 days Parke Bancorp is expected to under-perform the Citizens Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Parke Bancorp is 1.54 times less risky than Citizens Bancorp. The stock trades about -0.04 of its potential returns per unit of risk. The Citizens Bancorp Investment is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,900 in Citizens Bancorp Investment on December 1, 2024 and sell it today you would earn a total of 0.00 from holding Citizens Bancorp Investment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parke Bancorp vs. Citizens Bancorp Investment
Performance |
| Timeline |
| Parke Bancorp |
| Citizens Bancorp Inv |
Parke Bancorp and Citizens Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parke Bancorp and Citizens Bancorp
The main advantage of trading using opposite Parke Bancorp and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parke Bancorp 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.| Parke Bancorp vs. Sound Financial Bancorp | Parke Bancorp vs. Finward Bancorp | Parke Bancorp vs. Franklin Financial Services | Parke Bancorp vs. Community West Bancshares |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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