Correlation Between Citizens Bancorp and Glen Burnie

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

Diversification Opportunities for Citizens Bancorp and Glen Burnie

0.35

Correlation Coefficient

Citizens Bancorp  Glen Burnie

Weak diversification

The 3 months correlation between Citizens and Glen is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancorp Investment and Glen Burnie Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glen Burnie 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 Glen Burnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glen Burnie Bancorp has no effect on the direction of Citizens Bancorp i.e., Citizens Bancorp and Glen Burnie go up and down completely randomly.

Pair Corralation between Citizens Bancorp and Glen Burnie

Given the investment horizon of 90 days Citizens Bancorp is expected to generate 1.06 times less return on investment than Glen Burnie. But when comparing it to its historical volatility, Citizens Bancorp Investment is 6.74 times less risky than Glen Burnie. It trades about 0.23 of its potential returns per unit of risk. Glen Burnie Bancorp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  578.00  in Glen Burnie Bancorp on September 22, 2024 and sell it today you would earn a total of  7.00  from holding Glen Burnie Bancorp or generate 1.21% 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.  Glen Burnie Bancorp

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.

Glen Burnie Bancorp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Glen Burnie Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental drivers, Glen Burnie may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citizens Bancorp and Glen Burnie

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

The idea behind Citizens Bancorp Investment and Glen Burnie Bancorp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.