Correlation Between Citizens Financial and Pure Storage,

Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Pure Storage, 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 Pure Storage, 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 Pure Storage,, you can compare the effects of market volatilities on Citizens Financial and Pure Storage, 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 Pure Storage,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Pure Storage,.

Diversification Opportunities for Citizens Financial and Pure Storage,

0.53

Correlation Coefficient

Citizens Financial  Pure Storage,

Very weak diversification

The 3 months correlation between Citizens and Pure is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, and Pure Storage, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Storage, 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 Pure Storage,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Storage, has no effect on the direction of Citizens Financial i.e., Citizens Financial and Pure Storage, go up and down completely randomly.

Pair Corralation between Citizens Financial and Pure Storage,

Assuming the 90 days trading horizon Citizens Financial is expected to generate 1.89 times less return on investment than Pure Storage,. But when comparing it to its historical volatility, Citizens Financial Group, is 1.7 times less risky than Pure Storage,. It trades about 0.14 of its potential returns per unit of risk. Pure Storage, is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  7,035  in Pure Storage, on October 8, 2024 and sell it today you would earn a total of  2,845  from holding Pure Storage, or generate 40.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Citizens Financial Group,  vs.  Pure Storage,

Citizens Financial Group,

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Group, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Citizens Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pure Storage,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pure Storage, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Pure Storage, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citizens Financial and Pure Storage,

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

The idea behind Citizens Financial Group, and Pure Storage, 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.