Correlation Between Citizens Financial and Bio Techne

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

Diversification Opportunities for Citizens Financial and Bio Techne

0.78

Correlation Coefficient

Citizens Financial  Bio Techne

Poor diversification

The 3 months correlation between Citizens and Bio is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, and Bio Techne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Techne 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 Bio Techne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Techne has no effect on the direction of Citizens Financial i.e., Citizens Financial and Bio Techne go up and down completely randomly.

Pair Corralation between Citizens Financial and Bio Techne

Assuming the 90 days trading horizon Citizens Financial Group, is expected to generate 1.01 times more return on investment than Bio Techne. However, Citizens Financial is 1.01 times more volatile than Bio Techne. It trades about -0.1 of its potential returns per unit of risk. Bio Techne is currently generating about -0.33 per unit of risk. If you would invest  26,714  in Citizens Financial Group, on December 23, 2024 and sell it today you would lose (2,314) from holding Citizens Financial Group, or give up 8.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Citizens Financial Group,  vs.  Bio Techne

Citizens Financial Group,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citizens Financial Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Bio Techne

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bio Techne has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Citizens Financial and Bio Techne

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

The idea behind Citizens Financial Group, and Bio Techne 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.