Correlation Between Citizens Bancorp and Farmers Merchants
Can any of the company-specific risk be diversified away by investing in both Citizens Bancorp and Farmers Merchants 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 Farmers Merchants 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 Farmers Merchants Bancorp, you can compare the effects of market volatilities on Citizens Bancorp and Farmers Merchants 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 Farmers Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Bancorp and Farmers Merchants.
Diversification Opportunities for Citizens Bancorp and Farmers Merchants
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citizens and Farmers is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancorp Investment and Farmers Merchants Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Merchants Bancorp 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 Farmers Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Merchants Bancorp has no effect on the direction of Citizens Bancorp i.e., Citizens Bancorp and Farmers Merchants go up and down completely randomly.
Pair Corralation between Citizens Bancorp and Farmers Merchants
Given the investment horizon of 90 days Citizens Bancorp Investment is expected to generate 0.6 times more return on investment than Farmers Merchants. However, Citizens Bancorp Investment is 1.68 times less risky than Farmers Merchants. It trades about 0.29 of its potential returns per unit of risk. Farmers Merchants Bancorp is currently generating about 0.11 per unit of risk. If you would invest 2,200 in Citizens Bancorp Investment on October 6, 2024 and sell it today you would earn a total of 450.00 from holding Citizens Bancorp Investment or generate 20.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 97.62% |
Values | Daily Returns |
Citizens Bancorp Investment vs. Farmers Merchants Bancorp
Performance |
Timeline |
Citizens Bancorp Inv |
Farmers Merchants Bancorp |
Citizens Bancorp and Farmers Merchants Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citizens Bancorp and Farmers Merchants
The main advantage of trading using opposite Citizens Bancorp and Farmers Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Bancorp position performs unexpectedly, Farmers Merchants 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 Farmers Merchants will offset losses from the drop in Farmers Merchants' long position.Citizens Bancorp vs. Greenville Federal Financial | Citizens Bancorp vs. First Ottawa Bancshares | Citizens Bancorp vs. Coastal Carolina Bancshares | Citizens Bancorp vs. First Bankers Trustshares |
Farmers Merchants vs. PSB Holdings | Farmers Merchants vs. Eagle Financial Services | Farmers Merchants vs. National Capital Bank | Farmers Merchants vs. Community Heritage Financial |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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