Correlation Between Citizens Financial and SVB Financial

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

Diversification Opportunities for Citizens Financial and SVB Financial

0.0

Correlation Coefficient

Citizens Financial  SVB Financial

Pay attention - limited upside

The 3 months correlation between Citizens and SVB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, and SVB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVB Financial Group 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 SVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVB Financial Group has no effect on the direction of Citizens Financial i.e., Citizens Financial and SVB Financial go up and down completely randomly.

Pair Corralation between Citizens Financial and SVB Financial

If you would invest  23,638  in Citizens Financial Group, on October 24, 2024 and sell it today you would earn a total of  5,342  from holding Citizens Financial Group, or generate 22.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citizens Financial Group,  vs.  SVB Financial Group

Citizens Financial Group,

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Group, are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Citizens Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

SVB Financial Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SVB Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, SVB Financial is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citizens Financial and SVB Financial

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

The idea behind Citizens Financial Group, and SVB 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.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.