Correlation Between Citizens Community and First Capital

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

Diversification Opportunities for Citizens Community and First Capital

0.16

Correlation Coefficient

Citizens Community  First Capital

Average diversification

The 3 months correlation between Citizens and First is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Community Bancorp and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital 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 First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of Citizens Community i.e., Citizens Community and First Capital go up and down completely randomly.

Pair Corralation between Citizens Community and First Capital

Given the investment horizon of 90 days Citizens Community Bancorp is expected to generate 0.62 times more return on investment than First Capital. However, Citizens Community Bancorp is 1.61 times less risky than First Capital. It trades about 0.0 of its potential returns per unit of risk. First Capital is currently generating about -0.2 per unit of risk. If you would invest  1,490  in Citizens Community Bancorp on May 2, 2025 and sell it today you would lose (16.00) from holding Citizens Community Bancorp or give up 1.07% of portfolio value over 90 days.

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

Citizens Community Bancorp  vs.  First Capital

Citizens Community

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citizens Community Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

First Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in August 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Citizens Community and First Capital

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

The idea behind Citizens Community Bancorp and First Capital 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.