Correlation Between Citizens Community and AstroNova

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

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

Diversification Opportunities for Citizens Community and AstroNova

0.81

Correlation Coefficient

Citizens Community  AstroNova

Very poor diversification

The 3 months correlation between Citizens and AstroNova is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Community Bancorp and AstroNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstroNova and Citizens Community 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 Community Bancorp are associated (or correlated) with AstroNova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstroNova has no effect on the direction of Citizens Community i.e., Citizens Community and AstroNova go up and down completely randomly.

Pair Corralation between Citizens Community and AstroNova

Given the investment horizon of 90 days Citizens Community Bancorp is expected to generate 0.47 times more return on investment than AstroNova. However, Citizens Community Bancorp is 2.14 times less risky than AstroNova. It trades about -0.12 of its potential returns per unit of risk. AstroNova is currently generating about -0.16 per unit of risk. If you would invest  1,601  in Citizens Community Bancorp on December 30, 2024 and sell it today you would lose (164.00) from holding Citizens Community Bancorp or give up 10.24% of portfolio value over 90 days.

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

Citizens Community Bancorp  vs.  AstroNova

Citizens Community

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citizens Community Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

AstroNova

Risk-Adjusted Performance

Very Weak

Over the last 90 days AstroNova has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic 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.

Pair Trading with Citizens Community and AstroNova

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

The idea behind Citizens Community Bancorp and AstroNova 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.