Correlation Between Citizens Financial and Associated Banc
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Associated Banc 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 Associated Banc 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 Associated Banc Corp, you can compare the effects of market volatilities on Citizens Financial and Associated Banc 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 Associated Banc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Associated Banc.
Diversification Opportunities for Citizens Financial and Associated Banc
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citizens and Associated is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Associated Banc Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Banc Corp 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 Associated Banc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Banc Corp has no effect on the direction of Citizens Financial i.e., Citizens Financial and Associated Banc go up and down completely randomly.
Pair Corralation between Citizens Financial and Associated Banc
Assuming the 90 days trading horizon Citizens Financial Group is expected to generate 1.19 times more return on investment than Associated Banc. However, Citizens Financial is 1.19 times more volatile than Associated Banc Corp. It trades about 0.03 of its potential returns per unit of risk. Associated Banc Corp is currently generating about 0.02 per unit of risk. If you would invest 1,787 in Citizens Financial Group on August 30, 2024 and sell it today you would earn a total of 279.00 from holding Citizens Financial Group or generate 15.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group vs. Associated Banc Corp
Performance |
| Timeline |
| Citizens Financial |
| Associated Banc Corp |
Citizens Financial and Associated Banc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Associated Banc
The main advantage of trading using opposite Citizens Financial and Associated Banc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Associated Banc 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 Associated Banc will offset losses from the drop in Associated Banc's long position.| Citizens Financial vs. Capital One Financial | Citizens Financial vs. Capital One Financial | Citizens Financial vs. Bank of America | Citizens Financial vs. KeyCorp |
| Associated Banc vs. Truist Financial | Associated Banc vs. MetLife Preferred Stock | Associated Banc vs. US Bancorp |
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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