Correlation Between CCSB Financial and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both CCSB Financial 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 CCSB Financial and Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCSB Financial Corp and Citizens Financial Corp, you can compare the effects of market volatilities on CCSB Financial 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 CCSB Financial with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCSB Financial and Citizens Financial.
Diversification Opportunities for CCSB Financial and Citizens Financial
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CCSB and Citizens is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding CCSB Financial Corp 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 CCSB 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 CCSB Financial Corp 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 CCSB Financial i.e., CCSB Financial and Citizens Financial go up and down completely randomly.
Pair Corralation between CCSB Financial and Citizens Financial
Given the investment horizon of 90 days CCSB Financial Corp is expected to under-perform the Citizens Financial. But the pink sheet apears to be less risky and, when comparing its historical volatility, CCSB Financial Corp is 2.74 times less risky than Citizens Financial. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Citizens Financial Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,026 in Citizens Financial Corp on August 25, 2024 and sell it today you would earn a total of 474.00 from holding Citizens Financial Corp or generate 23.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCSB Financial Corp vs. Citizens Financial Corp
Performance |
| Timeline |
| CCSB Financial Corp |
| Citizens Financial Corp |
CCSB Financial and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCSB Financial and Citizens Financial
The main advantage of trading using opposite CCSB Financial and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCSB Financial 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.| CCSB Financial vs. Asbury Automotive Group | CCSB Financial vs. Kite Realty Group | CCSB Financial vs. Grocery Outlet Holding | CCSB Financial vs. Corporacion America Airports |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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