Correlation Between Virginia National and Citizens Holding
Can any of the company-specific risk be diversified away by investing in both Virginia National and Citizens Holding 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 Virginia National and Citizens Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virginia National Bankshares and Citizens Holding, you can compare the effects of market volatilities on Virginia National and Citizens Holding 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 Virginia National with a short position of Citizens Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and Citizens Holding.
Diversification Opportunities for Virginia National and Citizens Holding
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virginia and Citizens is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and Citizens Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Holding and Virginia National 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 Virginia National Bankshares are associated (or correlated) with Citizens Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Holding has no effect on the direction of Virginia National i.e., Virginia National and Citizens Holding go up and down completely randomly.
Pair Corralation between Virginia National and Citizens Holding
If you would invest 1,195 in Citizens Holding on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Citizens Holding or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Virginia National Bankshares vs. Citizens Holding
Performance |
| Timeline |
| Virginia National |
| Citizens Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Virginia National and Citizens Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and Citizens Holding
The main advantage of trading using opposite Virginia National and Citizens Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National position performs unexpectedly, Citizens Holding 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 Holding will offset losses from the drop in Citizens Holding's long position.| Virginia National vs. Finward Bancorp | Virginia National vs. Community West Bancshares | Virginia National vs. First Financial Northwest | Virginia National vs. Oak Valley Bancorp |
| Citizens Holding vs. Home Federal Bancorp | Citizens Holding vs. Lake Shore Bancorp | Citizens Holding vs. Community West Bancshares | Citizens Holding vs. Magyar 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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