Correlation Between Citizens Bancorp and Kentucky First

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

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

Diversification Opportunities for Citizens Bancorp and Kentucky First

0.18

Correlation Coefficient

Citizens Bancorp  Kentucky First

Average diversification

The 3 months correlation between Citizens and Kentucky is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancorp Investment and Kentucky First Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentucky First Federal and Citizens Bancorp 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 Bancorp Investment are associated (or correlated) with Kentucky First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentucky First Federal has no effect on the direction of Citizens Bancorp i.e., Citizens Bancorp and Kentucky First go up and down completely randomly.

Pair Corralation between Citizens Bancorp and Kentucky First

Given the investment horizon of 90 days Citizens Bancorp Investment is expected to generate 0.51 times more return on investment than Kentucky First. However, Citizens Bancorp Investment is 1.95 times less risky than Kentucky First. It trades about 0.08 of its potential returns per unit of risk. Kentucky First Federal is currently generating about -0.02 per unit of risk. If you would invest  2,332  in Citizens Bancorp Investment on September 4, 2024 and sell it today you would earn a total of  198.00  from holding Citizens Bancorp Investment or generate 8.49% return on investment over 90 days.

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

Citizens Bancorp Investment  vs.  Kentucky First Federal

Citizens Bancorp Inv

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Bancorp Investment are ranked lower than 6 (%) 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.

Kentucky First Federal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kentucky First Federal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Kentucky First is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citizens Bancorp and Kentucky First

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

The idea behind Citizens Bancorp Investment and Kentucky First Federal 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.

Check out your portfolio center.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.