Correlation Between Citizens Financial and Annaly Capital
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Annaly Capital 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 Citizens Financial and Annaly Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Financial Group, and Annaly Capital Management,, you can compare the effects of market volatilities on Citizens Financial and Annaly Capital 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 Citizens Financial with a short position of Annaly Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Annaly Capital.
Diversification Opportunities for Citizens Financial and Annaly Capital
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citizens and Annaly is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, and Annaly Capital Management, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annaly Capital Manag and Citizens Financial 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 Citizens Financial Group, are associated (or correlated) with Annaly Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annaly Capital Manag has no effect on the direction of Citizens Financial i.e., Citizens Financial and Annaly Capital go up and down completely randomly.
Pair Corralation between Citizens Financial and Annaly Capital
Assuming the 90 days trading horizon Citizens Financial Group, is expected to generate 1.37 times more return on investment than Annaly Capital. However, Citizens Financial is 1.37 times more volatile than Annaly Capital Management,. It trades about 0.12 of its potential returns per unit of risk. Annaly Capital Management, is currently generating about 0.1 per unit of risk. If you would invest 12,512 in Citizens Financial Group, on October 28, 2024 and sell it today you would earn a total of 15,566 from holding Citizens Financial Group, or generate 124.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.37% |
| Values | Daily Returns |
Citizens Financial Group, vs. Annaly Capital Management,
Performance |
| Timeline |
| Citizens Financial Group, |
| Annaly Capital Manag |
Citizens Financial and Annaly Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Annaly Capital
The main advantage of trading using opposite Citizens Financial and Annaly Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Annaly Capital 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 Annaly Capital will offset losses from the drop in Annaly Capital's long position.| Citizens Financial vs. HDFC Bank Limited | Citizens Financial vs. Ita Unibanco Holding | Citizens Financial vs. Ita Unibanco Holding | Citizens Financial vs. Deutsche Bank Aktiengesellschaft |
| Annaly Capital vs. Tyson Foods | Annaly Capital vs. United Airlines Holdings | Annaly Capital vs. Lloyds Banking Group | Annaly Capital vs. Patria Investments Limited |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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