Correlation Between Citizens Community and Ashford

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

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

Diversification Opportunities for Citizens Community and Ashford

0.68

Correlation Coefficient

Citizens Community  Ashford

Poor diversification

The 3 months correlation between Citizens and Ashford is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Community Bancorp and Ashford in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashford and Citizens Community 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 Community Bancorp are associated (or correlated) with Ashford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashford has no effect on the direction of Citizens Community i.e., Citizens Community and Ashford go up and down completely randomly.

Pair Corralation between Citizens Community and Ashford

If you would invest  1,413  in Citizens Community Bancorp on September 1, 2024 and sell it today you would earn a total of  208.00  from holding Citizens Community Bancorp or generate 14.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Citizens Community Bancorp  vs.  Ashford

Citizens Community

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Community Bancorp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Citizens Community demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Ashford

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ashford has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ashford is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citizens Community and Ashford

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

The idea behind Citizens Community Bancorp and Ashford 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.