Correlation Between Oak Valley and Citizens Holding

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

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

Diversification Opportunities for Oak Valley and Citizens Holding

0.0

Correlation Coefficient

Oak Valley  Citizens Holding

Pay attention - limited upside

The 3 months correlation between Oak and Citizens is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oak Valley Bancorp and Citizens Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Holding and Oak Valley 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 Oak Valley Bancorp are associated (or correlated) with Citizens Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Holding has no effect on the direction of Oak Valley i.e., Oak Valley and Citizens Holding go up and down completely randomly.

Pair Corralation between Oak Valley and Citizens Holding

If you would invest (100.00) in Citizens Holding on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Citizens Holding or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Oak Valley Bancorp  vs.  Citizens Holding

Oak Valley Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oak Valley Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Citizens Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citizens Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Citizens Holding is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Oak Valley and Citizens Holding

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

The idea behind Oak Valley Bancorp and Citizens Holding 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.