Correlation Between Citizens Bancshares and Mifflinburg Bancorp

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

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

Diversification Opportunities for Citizens Bancshares and Mifflinburg Bancorp

-0.38

Correlation Coefficient

Citizens Bancshares  Mifflinburg Bancorp

Very good diversification

The 3 months correlation between Citizens and Mifflinburg is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancshares Corp and Mifflinburg Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mifflinburg Bancorp and Citizens Bancshares 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 Bancshares Corp are associated (or correlated) with Mifflinburg Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mifflinburg Bancorp has no effect on the direction of Citizens Bancshares i.e., Citizens Bancshares and Mifflinburg Bancorp go up and down completely randomly.

Pair Corralation between Citizens Bancshares and Mifflinburg Bancorp

Given the investment horizon of 90 days Citizens Bancshares Corp is expected to under-perform the Mifflinburg Bancorp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Citizens Bancshares Corp is 1.47 times less risky than Mifflinburg Bancorp. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Mifflinburg Bancorp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,335  in Mifflinburg Bancorp on October 8, 2024 and sell it today you would earn a total of  165.00  from holding Mifflinburg Bancorp or generate 7.07% return on investment over 90 days.

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

Citizens Bancshares Corp  vs.  Mifflinburg Bancorp

Citizens Bancshares Corp

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Bancshares Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, Citizens Bancshares is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Mifflinburg Bancorp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mifflinburg Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Mifflinburg Bancorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Citizens Bancshares and Mifflinburg Bancorp

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

The idea behind Citizens Bancshares Corp and Mifflinburg 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 Commodity Directory module to find actively traded commodities issued by global exchanges.