Correlation Between CROWN and Citizens Bancorp

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

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

Diversification Opportunities for CROWN and Citizens Bancorp

-0.42

Correlation Coefficient

CROWN  Citizens Bancorp

Very good diversification

The 3 months correlation between CROWN and Citizens is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CROWN CASTLE INTERNATIONAL 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 CROWN 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 CROWN CASTLE INTERNATIONAL 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 CROWN i.e., CROWN and Citizens Bancorp go up and down completely randomly.

Pair Corralation between CROWN and Citizens Bancorp

Assuming the 90 days trading horizon CROWN is expected to generate 24.16 times less return on investment than Citizens Bancorp. But when comparing it to its historical volatility, CROWN CASTLE INTERNATIONAL is 4.58 times less risky than Citizens Bancorp. It trades about 0.03 of its potential returns per unit of risk. Citizens Bancorp Investment is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,382  in Citizens Bancorp Investment on October 23, 2024 and sell it today you would earn a total of  353.00  from holding Citizens Bancorp Investment or generate 14.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

CROWN CASTLE INTERNATIONAL  vs.  Citizens Bancorp Investment

CROWN CASTLE INTERNA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CROWN CASTLE INTERNATIONAL are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CROWN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Citizens Bancorp Inv

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Bancorp Investment are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Citizens Bancorp displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CROWN and Citizens Bancorp

The main advantage of trading using opposite CROWN and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CROWN 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 CROWN CASTLE INTERNATIONAL 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.