Correlation Between United Bancorporation and Citizens Bancshares
Can any of the company-specific risk be diversified away by investing in both United Bancorporation 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 United Bancorporation and Citizens Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bancorporation of and Citizens Bancshares Corp, you can compare the effects of market volatilities on United Bancorporation 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 United Bancorporation with a short position of Citizens Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorporation and Citizens Bancshares.
Diversification Opportunities for United Bancorporation and Citizens Bancshares
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Citizens is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp. of 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 United Bancorporation 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 United Bancorporation of 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 United Bancorporation i.e., United Bancorporation and Citizens Bancshares go up and down completely randomly.
Pair Corralation between United Bancorporation and Citizens Bancshares
Given the investment horizon of 90 days United Bancorporation of is expected to generate 0.5 times more return on investment than Citizens Bancshares. However, United Bancorporation of is 1.99 times less risky than Citizens Bancshares. It trades about 0.3 of its potential returns per unit of risk. Citizens Bancshares Corp is currently generating about 0.08 per unit of risk. If you would invest 5,480 in United Bancorporation of on August 28, 2024 and sell it today you would earn a total of 420.00 from holding United Bancorporation of or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Bancorp. of vs. Citizens Bancshares Corp
Performance |
| Timeline |
| United Bancorporation |
| Citizens Bancshares Corp |
United Bancorporation and Citizens Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bancorporation and Citizens Bancshares
The main advantage of trading using opposite United Bancorporation and Citizens Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancorporation 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.| United Bancorporation vs. MF Bancorp | United Bancorporation vs. Merchants Marine Bancorp | United Bancorporation vs. MNB Holdings Corp | United Bancorporation vs. Security Federal |
| Citizens Bancshares vs. Harbor Bankshares | Citizens Bancshares vs. BankFirst Capital | Citizens Bancshares vs. Security Federal | Citizens Bancshares vs. MF Bancorp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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