Correlation Between Tripadvisor and Citizens Financial

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

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

Diversification Opportunities for Tripadvisor and Citizens Financial

0.0

Correlation Coefficient

Tripadvisor  Citizens Financial

Pay attention - limited upside

The 3 months correlation between Tripadvisor and Citizens is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tripadvisor 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 Tripadvisor 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 Tripadvisor 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 Tripadvisor i.e., Tripadvisor and Citizens Financial go up and down completely randomly.

Pair Corralation between Tripadvisor and Citizens Financial

If you would invest (100.00) in Tripadvisor on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Tripadvisor or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Tripadvisor  vs.  Citizens Financial Group,

Tripadvisor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tripadvisor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tripadvisor 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

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 weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Tripadvisor and Citizens Financial

The main advantage of trading using opposite Tripadvisor and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tripadvisor 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 Tripadvisor 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.