Correlation Between Citizens Financial and BankUnited
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and BankUnited 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 BankUnited 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 BankUnited, you can compare the effects of market volatilities on Citizens Financial and BankUnited 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 BankUnited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and BankUnited.
Diversification Opportunities for Citizens Financial and BankUnited
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citizens and BankUnited is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited 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 BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of Citizens Financial i.e., Citizens Financial and BankUnited go up and down completely randomly.
Pair Corralation between Citizens Financial and BankUnited
Assuming the 90 days trading horizon Citizens Financial Group is expected to under-perform the BankUnited. But the preferred stock apears to be less risky and, when comparing its historical volatility, Citizens Financial Group is 3.51 times less risky than BankUnited. The preferred stock trades about -0.2 of its potential returns per unit of risk. The BankUnited is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,551 in BankUnited on August 30, 2024 and sell it today you would earn a total of 685.00 from holding BankUnited or generate 19.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group vs. BankUnited
Performance |
| Timeline |
| Citizens Financial |
| BankUnited |
Citizens Financial and BankUnited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and BankUnited
The main advantage of trading using opposite Citizens Financial and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited'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 |
| BankUnited vs. SVB T Corp | BankUnited vs. First Capital | BankUnited vs. Pioneer Bankcorp | BankUnited vs. Liberty Northwest 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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