Correlation Between Citizens Financial and CreditRiskMonitorCom

Can any of the company-specific risk be diversified away by investing in both Citizens Financial and CreditRiskMonitorCom 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 CreditRiskMonitorCom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citizens Financial Corp and CreditRiskMonitorCom, you can compare the effects of market volatilities on Citizens Financial and CreditRiskMonitorCom 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 CreditRiskMonitorCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and CreditRiskMonitorCom.

Diversification Opportunities for Citizens Financial and CreditRiskMonitorCom

0.86

Correlation Coefficient

Citizens Financial  CreditRiskMonitorCom

Very poor diversification

The 3 months correlation between Citizens and CreditRiskMonitorCom is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Corp and CreditRiskMonitorCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CreditRiskMonitorCom 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 Corp are associated (or correlated) with CreditRiskMonitorCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CreditRiskMonitorCom has no effect on the direction of Citizens Financial i.e., Citizens Financial and CreditRiskMonitorCom go up and down completely randomly.

Pair Corralation between Citizens Financial and CreditRiskMonitorCom

Given the investment horizon of 90 days Citizens Financial Corp is expected to generate 0.26 times more return on investment than CreditRiskMonitorCom. However, Citizens Financial Corp is 3.91 times less risky than CreditRiskMonitorCom. It trades about -0.22 of its potential returns per unit of risk. CreditRiskMonitorCom is currently generating about -0.16 per unit of risk. If you would invest  2,500  in Citizens Financial Corp on October 5, 2024 and sell it today you would lose (75.00) from holding Citizens Financial Corp or give up 3.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

Citizens Financial Corp  vs.  CreditRiskMonitorCom

Citizens Financial Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Citizens Financial showed solid returns over the last few months and may actually be approaching a breakup point.

CreditRiskMonitorCom

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CreditRiskMonitorCom are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, CreditRiskMonitorCom showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citizens Financial and CreditRiskMonitorCom

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

The idea behind Citizens Financial Corp and CreditRiskMonitorCom 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.