Correlation Between Equity Bancshares, and Citizens Financial

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

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

Diversification Opportunities for Equity Bancshares, and Citizens Financial

0.25

Correlation Coefficient

Equity Bancshares,  Citizens Financial

Modest diversification

The 3 months correlation between Equity and Citizens is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and Citizens Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial and Equity Bancshares, 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 Equity Bancshares, 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 has no effect on the direction of Equity Bancshares, i.e., Equity Bancshares, and Citizens Financial go up and down completely randomly.

Pair Corralation between Equity Bancshares, and Citizens Financial

Given the investment horizon of 90 days Equity Bancshares, is expected to under-perform the Citizens Financial. In addition to that, Equity Bancshares, is 1.3 times more volatile than Citizens Financial Group. It trades about -0.06 of its total potential returns per unit of risk. Citizens Financial Group is currently generating about 0.06 per unit of volatility. If you would invest  1,871  in Citizens Financial Group on December 30, 2024 and sell it today you would earn a total of  81.00  from holding Citizens Financial Group or generate 4.33% return on investment over 90 days.

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

Equity Bancshares,  vs.  Citizens Financial Group

Equity Bancshares,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equity Bancshares, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Citizens Financial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Citizens Financial is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Equity Bancshares, and Citizens Financial

The main advantage of trading using opposite Equity Bancshares, and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Bancshares, 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 Equity Bancshares, 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.