Correlation Between Bank of Utica and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Bank of Utica 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 Bank of Utica and Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Utica and Citizens Financial Corp, you can compare the effects of market volatilities on Bank of Utica 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 Bank of Utica with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Utica and Citizens Financial.
Diversification Opportunities for Bank of Utica and Citizens Financial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Citizens is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Utica 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 Bank of Utica 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 Bank of Utica 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 Bank of Utica i.e., Bank of Utica and Citizens Financial go up and down completely randomly.
Pair Corralation between Bank of Utica and Citizens Financial
Given the investment horizon of 90 days Bank of Utica is expected to generate 1.82 times less return on investment than Citizens Financial. In addition to that, Bank of Utica is 1.47 times more volatile than Citizens Financial Corp. It trades about 0.02 of its total potential returns per unit of risk. Citizens Financial Corp is currently generating about 0.05 per unit of volatility. If you would invest 1,704 in Citizens Financial Corp on August 25, 2024 and sell it today you would earn a total of 796.00 from holding Citizens Financial Corp or generate 46.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 88.17% |
| Values | Daily Returns |
Bank of Utica vs. Citizens Financial Corp
Performance |
| Timeline |
| Bank of Utica |
| Citizens Financial Corp |
Bank of Utica and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Utica and Citizens Financial
The main advantage of trading using opposite Bank of Utica and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Utica 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.| Bank of Utica vs. Standard Bank Group | Bank of Utica vs. PSB Holdings | Bank of Utica vs. United Overseas Bank | Bank of Utica vs. Turkiye Garanti Bankasi |
| Citizens Financial vs. Standard Bank Group | Citizens Financial vs. PSB Holdings | Citizens Financial vs. United Overseas Bank | Citizens Financial vs. Turkiye Garanti Bankasi |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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