Correlation Between Citizens Financial and FIRST REP
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and FIRST REP 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 Financial and FIRST REP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Financial Group and FIRST REP BK, you can compare the effects of market volatilities on Citizens Financial and FIRST REP 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 Financial with a short position of FIRST REP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and FIRST REP.
Diversification Opportunities for Citizens Financial and FIRST REP
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citizens and FIRST is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and FIRST REP BK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST REP BK and Citizens Financial 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 Financial Group are associated (or correlated) with FIRST REP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST REP BK has no effect on the direction of Citizens Financial i.e., Citizens Financial and FIRST REP go up and down completely randomly.
Pair Corralation between Citizens Financial and FIRST REP
Considering the 90-day investment horizon Citizens Financial Group is expected to generate 0.05 times more return on investment than FIRST REP. However, Citizens Financial Group is 19.04 times less risky than FIRST REP. It trades about 0.06 of its potential returns per unit of risk. FIRST REP BK is currently generating about -0.5 per unit of risk. If you would invest 2,719 in Citizens Financial Group on January 26, 2024 and sell it today you would earn a total of 833.00 from holding Citizens Financial Group or generate 30.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 1.61% |
Values | Daily Returns |
Citizens Financial Group vs. FIRST REP BK
Performance |
Timeline |
Citizens Financial |
FIRST REP BK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citizens Financial and FIRST REP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citizens Financial and FIRST REP
The main advantage of trading using opposite Citizens Financial and FIRST REP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, FIRST REP 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 REP will offset losses from the drop in FIRST REP's long position.Citizens Financial vs. PNC Financial Services | Citizens Financial vs. Regions Financial | Citizens Financial vs. Fifth Third Bancorp | Citizens Financial vs. Comerica |
FIRST REP vs. Zions Bancorporation | FIRST REP vs. KeyCorp | FIRST REP vs. Comerica | FIRST REP vs. First Horizon National |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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