Correlation Between Canterbury Park and Citizens Community

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

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

Diversification Opportunities for Canterbury Park and Citizens Community

0.25

Correlation Coefficient

Canterbury Park  Citizens Community

Modest diversification

The 3 months correlation between Canterbury and Citizens is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Canterbury Park Holding and Citizens Community Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Community and Canterbury Park 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 Canterbury Park Holding are associated (or correlated) with Citizens Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Community has no effect on the direction of Canterbury Park i.e., Canterbury Park and Citizens Community go up and down completely randomly.

Pair Corralation between Canterbury Park and Citizens Community

Given the investment horizon of 90 days Canterbury Park is expected to generate 2.75 times less return on investment than Citizens Community. In addition to that, Canterbury Park is 1.85 times more volatile than Citizens Community Bancorp. It trades about 0.05 of its total potential returns per unit of risk. Citizens Community Bancorp is currently generating about 0.24 per unit of volatility. If you would invest  1,374  in Citizens Community Bancorp on September 3, 2024 and sell it today you would earn a total of  288.00  from holding Citizens Community Bancorp or generate 20.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.19%
Values	Daily Returns

Canterbury Park Holding  vs.  Citizens Community Bancorp

Canterbury Park Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Canterbury Park Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Canterbury Park may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Citizens Community

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Community Bancorp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Citizens Community demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canterbury Park and Citizens Community

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

The idea behind Canterbury Park Holding and Citizens Community 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.