Correlation Between Citizens Bancorp and First Keystone

Can any of the company-specific risk be diversified away by investing in both Citizens Bancorp and First Keystone 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 First Keystone 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 First Keystone Corp, you can compare the effects of market volatilities on Citizens Bancorp and First Keystone 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 First Keystone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Bancorp and First Keystone.

Diversification Opportunities for Citizens Bancorp and First Keystone

0.22

Correlation Coefficient

Citizens Bancorp  First Keystone

Modest diversification

The 3 months correlation between Citizens and First is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancorp Investment and First Keystone Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Keystone Corp 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 First Keystone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Keystone Corp has no effect on the direction of Citizens Bancorp i.e., Citizens Bancorp and First Keystone go up and down completely randomly.

Pair Corralation between Citizens Bancorp and First Keystone

Given the investment horizon of 90 days Citizens Bancorp Investment is expected to generate 0.26 times more return on investment than First Keystone. However, Citizens Bancorp Investment is 3.92 times less risky than First Keystone. It trades about 0.23 of its potential returns per unit of risk. First Keystone Corp is currently generating about -0.03 per unit of risk. If you would invest  2,450  in Citizens Bancorp Investment on September 22, 2024 and sell it today you would earn a total of  105.00  from holding Citizens Bancorp Investment or generate 4.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Citizens Bancorp Investment  vs.  First Keystone Corp

Citizens Bancorp Inv

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Bancorp Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Citizens Bancorp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

First Keystone Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Keystone Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, First Keystone unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citizens Bancorp and First Keystone

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

The idea behind Citizens Bancorp Investment and First Keystone Corp 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.