Correlation Between Citizens Bancshares and Cashmere Valley

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

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

Diversification Opportunities for Citizens Bancshares and Cashmere Valley

-0.42

Correlation Coefficient

Citizens Bancshares  Cashmere Valley

Very good diversification

The 3 months correlation between Citizens and Cashmere is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancshares Corp and Cashmere Valley Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cashmere Valley Bank and Citizens Bancshares 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 Bancshares Corp are associated (or correlated) with Cashmere Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cashmere Valley Bank has no effect on the direction of Citizens Bancshares i.e., Citizens Bancshares and Cashmere Valley go up and down completely randomly.

Pair Corralation between Citizens Bancshares and Cashmere Valley

Given the investment horizon of 90 days Citizens Bancshares Corp is expected to under-perform the Cashmere Valley. In addition to that, Citizens Bancshares is 1.27 times more volatile than Cashmere Valley Bank. It trades about -0.06 of its total potential returns per unit of risk. Cashmere Valley Bank is currently generating about 0.1 per unit of volatility. If you would invest  6,452  in Cashmere Valley Bank on May 14, 2025 and sell it today you would earn a total of  398.00  from holding Cashmere Valley Bank or generate 6.17% return on investment over 90 days.

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

Citizens Bancshares Corp  vs.  Cashmere Valley Bank

Citizens Bancshares Corp

Risk-Adjusted Performance

Weakest

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.

Cashmere Valley Bank

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Cashmere Valley Bank are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical indicators, Cashmere Valley may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Citizens Bancshares and Cashmere Valley

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

The idea behind Citizens Bancshares Corp and Cashmere Valley Bank 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.