Correlation Between Citizens Financial and LINKBANCORP

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

By analyzing existing cross correlation between Citizens Financial Services and LINKBANCORP, you can compare the effects of market volatilities on Citizens Financial and LINKBANCORP 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 LINKBANCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and LINKBANCORP.

Diversification Opportunities for Citizens Financial and LINKBANCORP

0.67

Correlation Coefficient

Citizens Financial  LINKBANCORP

Poor diversification

The 3 months correlation between Citizens and LINKBANCORP is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Services and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP 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 Services are associated (or correlated) with LINKBANCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINKBANCORP has no effect on the direction of Citizens Financial i.e., Citizens Financial and LINKBANCORP go up and down completely randomly.

Pair Corralation between Citizens Financial and LINKBANCORP

Given the investment horizon of 90 days Citizens Financial Services is expected to under-perform the LINKBANCORP. In addition to that, Citizens Financial is 1.59 times more volatile than LINKBANCORP. It trades about -0.07 of its total potential returns per unit of risk. LINKBANCORP is currently generating about 0.04 per unit of volatility. If you would invest  737.00  in LINKBANCORP on December 1, 2024 and sell it today you would earn a total of  25.00  from holding LINKBANCORP or generate 3.39% return on investment over 90 days.

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

Citizens Financial Services  vs.  LINKBANCORP

Citizens Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citizens Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

LINKBANCORP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LINKBANCORP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, LINKBANCORP is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citizens Financial and LINKBANCORP

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

The idea behind Citizens Financial Services and LINKBANCORP 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.