Correlation Between INTERNET INJPADR and Citizens Financial

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

By analyzing existing cross correlation between INTERNET INJPADR 1 and Citizens Financial Group, you can compare the effects of market volatilities on INTERNET INJPADR 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 INTERNET INJPADR with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERNET INJPADR and Citizens Financial.

Diversification Opportunities for INTERNET INJPADR and Citizens Financial

0.63

Correlation Coefficient

INTERNET INJPADR  Citizens Financial

Poor diversification

The 3 months correlation between INTERNET and Citizens is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding INTERNET INJPADR 1 and Citizens Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial and INTERNET INJPADR 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 INTERNET INJPADR 1 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 INTERNET INJPADR i.e., INTERNET INJPADR and Citizens Financial go up and down completely randomly.

Pair Corralation between INTERNET INJPADR and Citizens Financial

Assuming the 90 days horizon INTERNET INJPADR 1 is expected to under-perform the Citizens Financial. In addition to that, INTERNET INJPADR is 1.38 times more volatile than Citizens Financial Group. It trades about -0.13 of its total potential returns per unit of risk. Citizens Financial Group is currently generating about -0.09 per unit of volatility. If you would invest  4,132  in Citizens Financial Group on December 21, 2024 and sell it today you would lose (408.00) from holding Citizens Financial Group or give up 9.87% of portfolio value over 90 days.

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

INTERNET INJPADR 1  vs.  Citizens Financial Group

INTERNET INJPADR 1

Risk-Adjusted Performance

Very Weak

Over the last 90 days INTERNET INJPADR 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Citizens Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citizens Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with INTERNET INJPADR and Citizens Financial

The main advantage of trading using opposite INTERNET INJPADR and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERNET INJPADR 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 INTERNET INJPADR 1 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.