Correlation Between Bluerock Homes and Citizens Bancorp

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

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

Diversification Opportunities for Bluerock Homes and Citizens Bancorp

-0.17

Correlation Coefficient

Bluerock Homes  Citizens Bancorp

Good diversification

The 3 months correlation between Bluerock and Citizens is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Homes Trust 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 Bluerock Homes 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 Bluerock Homes Trust 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 Bluerock Homes i.e., Bluerock Homes and Citizens Bancorp go up and down completely randomly.

Pair Corralation between Bluerock Homes and Citizens Bancorp

Considering the 90-day investment horizon Bluerock Homes Trust is expected to under-perform the Citizens Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Bluerock Homes Trust is 1.2 times less risky than Citizens Bancorp. The stock trades about -0.13 of its potential returns per unit of risk. The Citizens Bancorp Investment is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,382  in Citizens Bancorp Investment on September 23, 2024 and sell it today you would earn a total of  173.00  from holding Citizens Bancorp Investment or generate 7.26% return on investment over 90 days.

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

Bluerock Homes Trust  vs.  Citizens Bancorp Investment

Bluerock Homes Trust

Risk-Adjusted Performance

0 of 100

Very Weak

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

Citizens Bancorp Inv

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Bancorp Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Citizens Bancorp is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bluerock Homes and Citizens Bancorp

The main advantage of trading using opposite Bluerock Homes and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluerock Homes 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 Bluerock Homes Trust 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.