Correlation Between 1ST SUMMIT and Citizens Bancorp

Can any of the company-specific risk be diversified away by investing in both 1ST SUMMIT and Citizens 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 1ST SUMMIT and Citizens Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1ST SUMMIT BANCORP and Citizens Bancorp Investment, you can compare the effects of market volatilities on 1ST SUMMIT and Citizens 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 1ST SUMMIT with a short position of Citizens Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1ST SUMMIT and Citizens Bancorp.

Diversification Opportunities for 1ST SUMMIT and Citizens Bancorp

-0.12

Correlation Coefficient

1ST SUMMIT  Citizens Bancorp

Good diversification

The 3 months correlation between 1ST and Citizens is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding 1ST SUMMIT BANCORP and Citizens Bancorp Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Bancorp Inv and 1ST SUMMIT 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 1ST SUMMIT BANCORP are associated (or correlated) with Citizens Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Bancorp Inv has no effect on the direction of 1ST SUMMIT i.e., 1ST SUMMIT and Citizens Bancorp go up and down completely randomly.

Pair Corralation between 1ST SUMMIT and Citizens Bancorp

Given the investment horizon of 90 days 1ST SUMMIT is expected to generate 1.22 times less return on investment than Citizens Bancorp. But when comparing it to its historical volatility, 1ST SUMMIT BANCORP is 1.58 times less risky than Citizens Bancorp. It trades about 0.09 of its potential returns per unit of risk. Citizens Bancorp Investment is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,332  in Citizens Bancorp Investment on September 3, 2024 and sell it today you would earn a total of  168.00  from holding Citizens Bancorp Investment or generate 7.2% return on investment over 90 days.

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

1ST SUMMIT BANCORP  vs.  Citizens Bancorp Investment

1ST SUMMIT BANCORP

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 1ST SUMMIT BANCORP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating primary indicators, 1ST SUMMIT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Citizens Bancorp Inv

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Bancorp Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Citizens Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with 1ST SUMMIT and Citizens Bancorp

The main advantage of trading using opposite 1ST SUMMIT and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1ST SUMMIT position performs unexpectedly, Citizens 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 Citizens Bancorp will offset losses from the drop in Citizens Bancorp's long position.

The idea behind 1ST SUMMIT BANCORP and Citizens Bancorp Investment 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.