Correlation Between Citizens Financial and MT Bank
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and MT Bank 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 MT Bank 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 MT Bank Corp, you can compare the effects of market volatilities on Citizens Financial and MT Bank 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 MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and MT Bank.
Diversification Opportunities for Citizens Financial and MT Bank
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citizens and MTZ is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp 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 MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of Citizens Financial i.e., Citizens Financial and MT Bank go up and down completely randomly.
Pair Corralation between Citizens Financial and MT Bank
Assuming the 90 days horizon Citizens Financial is expected to generate 1.69 times less return on investment than MT Bank. In addition to that, Citizens Financial is 1.13 times more volatile than MT Bank Corp. It trades about 0.02 of its total potential returns per unit of risk. MT Bank Corp is currently generating about 0.04 per unit of volatility. If you would invest 13,183 in MT Bank Corp on September 25, 2024 and sell it today you would earn a total of 4,962 from holding MT Bank Corp or generate 37.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Citizens Financial Group vs. MT Bank Corp
Performance |
Timeline |
Citizens Financial |
MT Bank Corp |
Citizens Financial and MT Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citizens Financial and MT Bank
The main advantage of trading using opposite Citizens Financial and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank's long position.Citizens Financial vs. The PNC Financial | Citizens Financial vs. MT Bank Corp | Citizens Financial vs. Huntington Bancshares Incorporated | Citizens Financial vs. Regions Financial |
MT Bank vs. The PNC Financial | MT Bank vs. Huntington Bancshares Incorporated | MT Bank vs. Regions Financial | MT Bank vs. Citizens Financial Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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