Correlation Between Taylor Calvin and Citizens Financial

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

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

Diversification Opportunities for Taylor Calvin and Citizens Financial

-0.44

Correlation Coefficient

Taylor Calvin  Citizens Financial

Very good diversification

The 3 months correlation between Taylor and Citizens is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Calvin B and Citizens Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Corp and Taylor Calvin 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 Taylor Calvin B 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 Corp has no effect on the direction of Taylor Calvin i.e., Taylor Calvin and Citizens Financial go up and down completely randomly.

Pair Corralation between Taylor Calvin and Citizens Financial

Given the investment horizon of 90 days Taylor Calvin B is expected to under-perform the Citizens Financial. But the otc stock apears to be less risky and, when comparing its historical volatility, Taylor Calvin B is 1.01 times less risky than Citizens Financial. The otc stock trades about -0.04 of its potential returns per unit of risk. The Citizens Financial Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,250  in Citizens Financial Corp on September 22, 2024 and sell it today you would earn a total of  175.00  from holding Citizens Financial Corp or generate 7.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.73%
Values	Daily Returns

Taylor Calvin B  vs.  Citizens Financial Corp

Taylor Calvin B

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Taylor Calvin B are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Taylor Calvin is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Citizens Financial Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Citizens Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Taylor Calvin and Citizens Financial

The main advantage of trading using opposite Taylor Calvin and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taylor Calvin 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 Taylor Calvin B and Citizens Financial Corp 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.