Correlation Between Citizens Bancorp and CoastalSouth Bancshares

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

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

Diversification Opportunities for Citizens Bancorp and CoastalSouth Bancshares

-0.08

Correlation Coefficient

Citizens Bancorp  CoastalSouth Bancshares

Good diversification

The 3 months correlation between Citizens and CoastalSouth is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancorp of and CoastalSouth Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoastalSouth Bancshares and Citizens Bancorp 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 Bancorp of are associated (or correlated) with CoastalSouth Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoastalSouth Bancshares has no effect on the direction of Citizens Bancorp i.e., Citizens Bancorp and CoastalSouth Bancshares go up and down completely randomly.

Pair Corralation between Citizens Bancorp and CoastalSouth Bancshares

Given the investment horizon of 90 days Citizens Bancorp of is expected to under-perform the CoastalSouth Bancshares. In addition to that, Citizens Bancorp is 1.23 times more volatile than CoastalSouth Bancshares. It trades about -0.05 of its total potential returns per unit of risk. CoastalSouth Bancshares is currently generating about 0.04 per unit of volatility. If you would invest  2,100  in CoastalSouth Bancshares on December 1, 2024 and sell it today you would earn a total of  50.00  from holding CoastalSouth Bancshares or generate 2.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.03%
Values	Daily Returns

Citizens Bancorp of  vs.  CoastalSouth Bancshares

Citizens Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citizens Bancorp of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Citizens Bancorp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

CoastalSouth Bancshares

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CoastalSouth Bancshares are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CoastalSouth Bancshares is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Citizens Bancorp and CoastalSouth Bancshares

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

The idea behind Citizens Bancorp of and CoastalSouth Bancshares 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.