Correlation Between Citizens Financial and Blue Foundry
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Blue Foundry 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 Blue Foundry 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 Blue Foundry Bancorp, you can compare the effects of market volatilities on Citizens Financial and Blue Foundry 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 Blue Foundry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Blue Foundry.
Diversification Opportunities for Citizens Financial and Blue Foundry
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citizens and Blue is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Blue Foundry Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Foundry Bancorp 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 Blue Foundry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Foundry Bancorp has no effect on the direction of Citizens Financial i.e., Citizens Financial and Blue Foundry go up and down completely randomly.
Pair Corralation between Citizens Financial and Blue Foundry
Assuming the 90 days trading horizon Citizens Financial Group is expected to under-perform the Blue Foundry. But the preferred stock apears to be less risky and, when comparing its historical volatility, Citizens Financial Group is 1.91 times less risky than Blue Foundry. The preferred stock trades about -0.2 of its potential returns per unit of risk. The Blue Foundry Bancorp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,007 in Blue Foundry Bancorp on August 31, 2024 and sell it today you would earn a total of 115.00 from holding Blue Foundry Bancorp or generate 11.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group vs. Blue Foundry Bancorp
Performance |
| Timeline |
| Citizens Financial |
| Blue Foundry Bancorp |
Citizens Financial and Blue Foundry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Blue Foundry
The main advantage of trading using opposite Citizens Financial and Blue Foundry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Blue Foundry 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 Blue Foundry will offset losses from the drop in Blue Foundry'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 |
| Blue Foundry vs. Home Federal Bancorp | Blue Foundry vs. Lake Shore Bancorp | Blue Foundry vs. Community West Bancshares | Blue Foundry vs. Bogota Financial Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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