Correlation Between First Citizens and Community Bancorp

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

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

Diversification Opportunities for First Citizens and Community Bancorp

-0.81

Correlation Coefficient

First Citizens  Community Bancorp

Pay attention - limited upside

The 3 months correlation between First and Community is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding The First Citizens and Community Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Bancorp and First Citizens 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 The First Citizens are associated (or correlated) with Community Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Bancorp has no effect on the direction of First Citizens i.e., First Citizens and Community Bancorp go up and down completely randomly.

Pair Corralation between First Citizens and Community Bancorp

Given the investment horizon of 90 days The First Citizens is expected to under-perform the Community Bancorp. In addition to that, First Citizens is 13.89 times more volatile than Community Bancorp. It trades about -0.17 of its total potential returns per unit of risk. Community Bancorp is currently generating about 0.41 per unit of volatility. If you would invest  1,781  in Community Bancorp on May 15, 2025 and sell it today you would earn a total of  516.00  from holding Community Bancorp or generate 28.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	50.82%
Values	Daily Returns

The First Citizens  vs.  Community Bancorp

First Citizens

Risk-Adjusted Performance

Weakest

Over the last 90 days The First Citizens has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Community Bancorp

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in Community Bancorp are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Community Bancorp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Citizens and Community Bancorp

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

The idea behind The First Citizens and Community Bancorp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..