Correlation Between Citizens Community and Park Electrochemical

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

Diversification Opportunities for Citizens Community and Park Electrochemical

0.31

Correlation Coefficient

Citizens Community  Park Electrochemical

Weak diversification

The 3 months correlation between Citizens and Park is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Community Bancorp and Park Electrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Electrochemical 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 Park Electrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Electrochemical has no effect on the direction of Citizens Community i.e., Citizens Community and Park Electrochemical go up and down completely randomly.

Pair Corralation between Citizens Community and Park Electrochemical

Given the investment horizon of 90 days Citizens Community is expected to generate 22.34 times less return on investment than Park Electrochemical. But when comparing it to its historical volatility, Citizens Community Bancorp is 1.66 times less risky than Park Electrochemical. It trades about 0.01 of its potential returns per unit of risk. Park Electrochemical is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,300  in Park Electrochemical on May 6, 2025 and sell it today you would earn a total of  487.00  from holding Park Electrochemical or generate 37.46% 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.  Park Electrochemical

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.

Park Electrochemical

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Park Electrochemical are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating forward-looking signals, Park Electrochemical exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citizens Community and Park Electrochemical

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

The idea behind Citizens Community Bancorp and Park Electrochemical 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.

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.