Correlation Between Citizens Financial and 1895 Of

Can any of the company-specific risk be diversified away by investing in both Citizens Financial and 1895 Of 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 1895 Of 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 1895 of Wisconsin, you can compare the effects of market volatilities on Citizens Financial and 1895 Of 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 1895 Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and 1895 Of.

Diversification Opportunities for Citizens Financial and 1895 Of

-0.47

Correlation Coefficient

Citizens Financial  1895 Of

Very good diversification

The 3 months correlation between Citizens and 1895 is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and 1895 of Wisconsin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1895 of Wisconsin 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 1895 Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1895 of Wisconsin has no effect on the direction of Citizens Financial i.e., Citizens Financial and 1895 Of go up and down completely randomly.

Pair Corralation between Citizens Financial and 1895 Of

Assuming the 90 days trading horizon Citizens Financial Group is expected to under-perform the 1895 Of. In addition to that, Citizens Financial is 2.81 times more volatile than 1895 of Wisconsin. It trades about -0.19 of its total potential returns per unit of risk. 1895 of Wisconsin is currently generating about 0.1 per unit of volatility. If you would invest  1,000.00  in 1895 of Wisconsin on September 24, 2024 and sell it today you would earn a total of  9.00  from holding 1895 of Wisconsin or generate 0.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Citizens Financial Group  vs.  1895 of Wisconsin

Citizens Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citizens Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Preferred Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

1895 of Wisconsin

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 1895 of Wisconsin are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, 1895 Of may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citizens Financial and 1895 Of

The main advantage of trading using opposite Citizens Financial and 1895 Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, 1895 Of 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 1895 Of will offset losses from the drop in 1895 Of's long position.

The idea behind Citizens Financial Group and 1895 of Wisconsin 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.