Correlation Between Citizens Bancshares and Exchange Bank

Can any of the company-specific risk be diversified away by investing in both Citizens Bancshares and Exchange Bank 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 Exchange Bank 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 Exchange Bank, you can compare the effects of market volatilities on Citizens Bancshares and Exchange Bank 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 Exchange Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Bancshares and Exchange Bank.

Diversification Opportunities for Citizens Bancshares and Exchange Bank

-0.02

Correlation Coefficient

Citizens Bancshares  Exchange Bank

Good diversification

The 3 months correlation between Citizens and Exchange is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancshares Corp and Exchange Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange 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 Exchange Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Bank has no effect on the direction of Citizens Bancshares i.e., Citizens Bancshares and Exchange Bank go up and down completely randomly.

Pair Corralation between Citizens Bancshares and Exchange Bank

Given the investment horizon of 90 days Citizens Bancshares Corp is expected to under-perform the Exchange Bank. But the pink sheet apears to be less risky and, when comparing its historical volatility, Citizens Bancshares Corp is 1.16 times less risky than Exchange Bank. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Exchange Bank is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  11,000  in Exchange Bank on May 14, 2025 and sell it today you would lose (164.00) from holding Exchange Bank or give up 1.49% of portfolio value over 90 days.

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

Citizens Bancshares Corp  vs.  Exchange 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.

Exchange Bank

Risk-Adjusted Performance

Weakest

Over the last 90 days Exchange Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Exchange Bank is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Citizens Bancshares and Exchange Bank

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

The idea behind Citizens Bancshares Corp and Exchange 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.