Correlation Between Citizens Financial and Juniata Valley

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

Diversification Opportunities for Citizens Financial and Juniata Valley

0.83

Correlation Coefficient

Citizens Financial  Juniata Valley

Very poor diversification

The 3 months correlation between Citizens and Juniata is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Corp and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial 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 Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of Citizens Financial i.e., Citizens Financial and Juniata Valley go up and down completely randomly.

Pair Corralation between Citizens Financial and Juniata Valley

Given the investment horizon of 90 days Citizens Financial Corp is expected to generate 0.59 times more return on investment than Juniata Valley. However, Citizens Financial Corp is 1.7 times less risky than Juniata Valley. It trades about 0.04 of its potential returns per unit of risk. Juniata Valley Financial is currently generating about 0.03 per unit of risk. If you would invest  1,800  in Citizens Financial Corp on September 24, 2024 and sell it today you would earn a total of  625.00  from holding Citizens Financial Corp or generate 34.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	77.08%
Values	Daily Returns

Citizens Financial Corp  vs.  Juniata Valley Financial

Citizens Financial Corp

Risk-Adjusted Performance

9 of 100

OK

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

Juniata Valley Financial

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Juniata Valley reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citizens Financial and Juniata Valley

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

The idea behind Citizens Financial Corp and Juniata Valley Financial 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.