Correlation Between Trxade and Citizens Bancshares

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

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

Diversification Opportunities for Trxade and Citizens Bancshares

-0.44

Correlation Coefficient

Trxade  Citizens Bancshares

Very good diversification

The 3 months correlation between Trxade and Citizens is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Trxade Group and Citizens Bancshares Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Bancshares Corp and Trxade 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 Trxade Group are associated (or correlated) with Citizens Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Bancshares Corp has no effect on the direction of Trxade i.e., Trxade and Citizens Bancshares go up and down completely randomly.

Pair Corralation between Trxade and Citizens Bancshares

If you would invest  5,120  in Citizens Bancshares Corp on September 28, 2024 and sell it today you would lose (20.00) from holding Citizens Bancshares Corp or give up 0.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Trxade Group  vs.  Citizens Bancshares Corp

Trxade Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trxade Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Trxade is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Citizens Bancshares Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citizens Bancshares Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Citizens Bancshares is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Trxade and Citizens Bancshares

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

The idea behind Trxade Group and Citizens Bancshares Corp 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.