Correlation Between WesBanco and Citizens Holding
Can any of the company-specific risk be diversified away by investing in both WesBanco 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 WesBanco and Citizens Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WesBanco and Citizens Holding, you can compare the effects of market volatilities on WesBanco 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 WesBanco with a short position of Citizens Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of WesBanco and Citizens Holding.
Diversification Opportunities for WesBanco and Citizens Holding
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WesBanco and Citizens is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding WesBanco and Citizens Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Holding and WesBanco 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 WesBanco 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 WesBanco i.e., WesBanco and Citizens Holding go up and down completely randomly.
Pair Corralation between WesBanco and Citizens Holding
Assuming the 90 days horizon WesBanco is expected to generate 0.59 times more return on investment than Citizens Holding. However, WesBanco is 1.69 times less risky than Citizens Holding. It trades about 0.03 of its potential returns per unit of risk. Citizens Holding is currently generating about -0.02 per unit of risk. If you would invest 2,211 in WesBanco on August 28, 2024 and sell it today you would earn a total of 299.00 from holding WesBanco or generate 13.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.72% |
| Values | Daily Returns |
WesBanco vs. Citizens Holding
Performance |
| Timeline |
| WesBanco |
| Citizens Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
WesBanco and Citizens Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WesBanco and Citizens Holding
The main advantage of trading using opposite WesBanco and Citizens Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WesBanco 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.The idea behind WesBanco and Citizens Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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