Correlation Between Citizens Financial and First Keystone

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

Diversification Opportunities for Citizens Financial and First Keystone

0.72

Correlation Coefficient

Citizens Financial  First Keystone

Poor diversification

The 3 months correlation between Citizens and First is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Corp 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 Financial 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 Financial Corp 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 Financial i.e., Citizens Financial and First Keystone go up and down completely randomly.

Pair Corralation between Citizens Financial and First Keystone

Given the investment horizon of 90 days Citizens Financial Corp is expected to generate 0.35 times more return on investment than First Keystone. However, Citizens Financial Corp is 2.88 times less risky than First Keystone. It trades about -0.06 of its potential returns per unit of risk. First Keystone Corp is currently generating about -0.33 per unit of risk. If you would invest  2,450  in Citizens Financial Corp on October 4, 2024 and sell it today you would lose (25.00) from holding Citizens Financial Corp or give up 1.02% of portfolio value over 90 days.

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

Citizens Financial Corp  vs.  First Keystone Corp

Citizens Financial Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Citizens Financial showed solid returns over the last few months and may actually be approaching a breakup point.

First Keystone Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in First Keystone Corp are ranked lower than 6 (%) 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 Financial and First Keystone

The main advantage of trading using opposite Citizens Financial and First Keystone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial 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 Financial Corp 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.

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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.