Correlation Between Fundo De and Citizens Financial

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

By analyzing existing cross correlation between Fundo De Investimento and Citizens Financial Group,, you can compare the effects of market volatilities on Fundo De and Citizens 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 Fundo De with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundo De and Citizens Financial.

Diversification Opportunities for Fundo De and Citizens Financial

-0.74

Correlation Coefficient

Fundo De  Citizens Financial

Pay attention - limited upside

The 3 months correlation between Fundo and Citizens is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fundo De Investimento and Citizens Financial Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Group, and Fundo De 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 Fundo De Investimento are associated (or correlated) with Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Group, has no effect on the direction of Fundo De i.e., Fundo De and Citizens Financial go up and down completely randomly.

Pair Corralation between Fundo De and Citizens Financial

Assuming the 90 days trading horizon Fundo De Investimento is expected to generate 1.18 times more return on investment than Citizens Financial. However, Fundo De is 1.18 times more volatile than Citizens Financial Group,. It trades about 0.06 of its potential returns per unit of risk. Citizens Financial Group, is currently generating about -0.11 per unit of risk. If you would invest  21,347  in Fundo De Investimento on October 6, 2024 and sell it today you would earn a total of  409.00  from holding Fundo De Investimento or generate 1.92% return on investment over 90 days.

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

Fundo De Investimento  vs.  Citizens Financial Group,

Fundo De Investimento

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fundo De Investimento are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Fundo De is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Fundo De and Citizens Financial

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

The idea behind Fundo De Investimento and Citizens 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.