Correlation Between Citizens Holding and SB Financial

Can any of the company-specific risk be diversified away by investing in both Citizens Holding and SB Financial 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 Holding and SB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citizens Holding and SB Financial Group, you can compare the effects of market volatilities on Citizens Holding and SB Financial 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 Holding with a short position of SB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Holding and SB Financial.

Diversification Opportunities for Citizens Holding and SB Financial

-0.52

Correlation Coefficient

Citizens Holding  SB Financial

Excellent diversification

The 3 months correlation between Citizens and SBFG is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Holding and SB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SB Financial Group and Citizens Holding 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 Holding are associated (or correlated) with SB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SB Financial Group has no effect on the direction of Citizens Holding i.e., Citizens Holding and SB Financial go up and down completely randomly.

Pair Corralation between Citizens Holding and SB Financial

If you would invest  1,195  in Citizens Holding on September 29, 2024 and sell it today you would earn a total of  0.00  from holding Citizens Holding or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Citizens Holding  vs.  SB Financial Group

Citizens Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citizens Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Citizens Holding is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

SB Financial Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SB Financial Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, SB Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citizens Holding and SB Financial

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

The idea behind Citizens Holding and SB Financial Group 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.