Correlation Between First Bancorp and Citizens Holding

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

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

Diversification Opportunities for First Bancorp and Citizens Holding

-0.11

Correlation Coefficient

First Bancorp  Citizens Holding

Good diversification

The 3 months correlation between First and Citizens is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding First Bancorp and Citizens Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Holding and First Bancorp 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 First Bancorp are associated (or correlated) with Citizens Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Holding has no effect on the direction of First Bancorp i.e., First Bancorp and Citizens Holding go up and down completely randomly.

Pair Corralation between First Bancorp and Citizens Holding

Given the investment horizon of 90 days First Bancorp is expected to generate 1.21 times more return on investment than Citizens Holding. However, First Bancorp is 1.21 times more volatile than Citizens Holding. It trades about -0.05 of its potential returns per unit of risk. Citizens Holding is currently generating about -0.2 per unit of risk. If you would invest  2,664  in First Bancorp on July 24, 2025 and sell it today you would lose (100.00) from holding First Bancorp or give up 3.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

First Bancorp  vs.  Citizens Holding

First Bancorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, First Bancorp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Citizens Holding

Risk-Adjusted Performance

Weakest

Over the last 90 days Citizens Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in November 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with First Bancorp and Citizens Holding

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

The idea behind First Bancorp and Citizens Holding 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.