Correlation Between Citizens Bancorp and SOUTHERN

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

Diversification Opportunities for Citizens Bancorp and SOUTHERN

0.05

Correlation Coefficient

Citizens Bancorp  SOUTHERN

Significant diversification

The 3 months correlation between Citizens and SOUTHERN is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancorp Investment and SOUTHERN PER CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN PER P 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN PER P has no effect on the direction of Citizens Bancorp i.e., Citizens Bancorp and SOUTHERN go up and down completely randomly.

Pair Corralation between Citizens Bancorp and SOUTHERN

Given the investment horizon of 90 days Citizens Bancorp Investment is expected to under-perform the SOUTHERN. But the otc stock apears to be less risky and, when comparing its historical volatility, Citizens Bancorp Investment is 31.59 times less risky than SOUTHERN. The otc stock trades about -0.05 of its potential returns per unit of risk. The SOUTHERN PER CORP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  11,228  in SOUTHERN PER CORP on September 25, 2024 and sell it today you would lose (211.00) from holding SOUTHERN PER CORP or give up 1.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.56%
Values	Daily Returns

Citizens Bancorp Investment  vs.  SOUTHERN PER 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 latest stock price disarray, may contribute to short-term losses for the investors.

SOUTHERN PER P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SOUTHERN PER CORP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SOUTHERN is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citizens Bancorp and SOUTHERN

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

The idea behind Citizens Bancorp Investment and SOUTHERN PER 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.