Correlation Between Citizens Community and Ethan Allen

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

Diversification Opportunities for Citizens Community and Ethan Allen

0.29

Correlation Coefficient

Citizens Community  Ethan Allen

Modest diversification

The 3 months correlation between Citizens and Ethan is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Community Bancorp and Ethan Allen Interiors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethan Allen Interiors 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 Ethan Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethan Allen Interiors has no effect on the direction of Citizens Community i.e., Citizens Community and Ethan Allen go up and down completely randomly.

Pair Corralation between Citizens Community and Ethan Allen

Given the investment horizon of 90 days Citizens Community is expected to generate 10.11 times less return on investment than Ethan Allen. But when comparing it to its historical volatility, Citizens Community Bancorp is 1.22 times less risky than Ethan Allen. It trades about 0.01 of its potential returns per unit of risk. Ethan Allen Interiors is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,529  in Ethan Allen Interiors on May 6, 2025 and sell it today you would earn a total of  386.00  from holding Ethan Allen Interiors or generate 15.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Citizens Community Bancorp  vs.  Ethan Allen Interiors

Citizens Community

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Community Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Citizens Community is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Ethan Allen Interiors

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ethan Allen Interiors are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Ethan Allen exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citizens Community and Ethan Allen

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

The idea behind Citizens Community Bancorp and Ethan Allen Interiors 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 Global Correlations module to find global opportunities by holding instruments from different markets.