Correlation Between First Citizens and Bank of Utica

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

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

Diversification Opportunities for First Citizens and Bank of Utica

0.0

Correlation Coefficient

First Citizens  Bank of Utica

Pay attention - limited upside

The 3 months correlation between First and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The First Citizens and Bank of Utica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Utica and First Citizens 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 The First Citizens are associated (or correlated) with Bank of Utica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Utica has no effect on the direction of First Citizens i.e., First Citizens and Bank of Utica go up and down completely randomly.

Pair Corralation between First Citizens and Bank of Utica

Given the investment horizon of 90 days The First Citizens is expected to under-perform the Bank of Utica. But the pink sheet apears to be less risky and, when comparing its historical volatility, The First Citizens is 4.23 times less risky than Bank of Utica. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Bank of Utica is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  52,975  in Bank of Utica on September 2, 2024 and sell it today you would lose (4,175) from holding Bank of Utica or give up 7.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	57.84%
Values	Daily Returns

The First Citizens  vs.  Bank of Utica

First Citizens

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The First Citizens has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, First Citizens is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Bank of Utica

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Utica are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bank of Utica unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Citizens and Bank of Utica

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

The idea behind The First Citizens and Bank of Utica 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.