Correlation Between Citizens Bancorp and Commercial National

Can any of the company-specific risk be diversified away by investing in both Citizens Bancorp and Commercial National 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 Citizens Bancorp and Commercial National into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citizens Bancorp Investment and Commercial National Financial, you can compare the effects of market volatilities on Citizens Bancorp and Commercial National 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 Citizens Bancorp with a short position of Commercial National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Bancorp and Commercial National.

Diversification Opportunities for Citizens Bancorp and Commercial National

0.7

Correlation Coefficient

Citizens Bancorp  Commercial National

Poor diversification

The 3 months correlation between Citizens and Commercial is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancorp Investment and Commercial National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial National and Citizens 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 Citizens Bancorp Investment are associated (or correlated) with Commercial National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial National has no effect on the direction of Citizens Bancorp i.e., Citizens Bancorp and Commercial National go up and down completely randomly.

Pair Corralation between Citizens Bancorp and Commercial National

Given the investment horizon of 90 days Citizens Bancorp Investment is expected to generate 0.98 times more return on investment than Commercial National. However, Citizens Bancorp Investment is 1.02 times less risky than Commercial National. It trades about 0.14 of its potential returns per unit of risk. Commercial National Financial is currently generating about 0.05 per unit of risk. If you would invest  2,382  in Citizens Bancorp Investment on October 21, 2024 and sell it today you would earn a total of  353.00  from holding Citizens Bancorp Investment or generate 14.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Citizens Bancorp Investment  vs.  Commercial National Financial

Citizens Bancorp Inv

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Bancorp Investment are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Citizens Bancorp displayed solid returns over the last few months and may actually be approaching a breakup point.

Commercial National

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Commercial National Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Commercial National is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citizens Bancorp and Commercial National

The main advantage of trading using opposite Citizens Bancorp and Commercial National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Bancorp position performs unexpectedly, Commercial National 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 Commercial National will offset losses from the drop in Commercial National's long position.

The idea behind Citizens Bancorp Investment and Commercial National Financial 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.