Correlation Between FIRST REP and Citizens Financial

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

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

Diversification Opportunities for FIRST REP and Citizens Financial

-0.61

Correlation Coefficient

FIRST REP  Citizens Financial

Excellent diversification

The 3 months correlation between FIRST and Citizens is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding FIRST REP BK and Citizens Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial and FIRST REP 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 REP BK are associated (or correlated) with Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial has no effect on the direction of FIRST REP i.e., FIRST REP and Citizens Financial go up and down completely randomly.

Pair Corralation between FIRST REP and Citizens Financial

If you would invest  33.00  in FIRST REP BK on January 20, 2024 and sell it today you would earn a total of  0.00  from holding FIRST REP BK or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

FIRST REP BK  vs.  Citizens Financial Group

FIRST REP BK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIRST REP BK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, FIRST REP is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Citizens Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Citizens Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FIRST REP and Citizens Financial

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

The idea behind FIRST REP BK and Citizens Financial Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.