Correlation Between Citizens Financial and Bank of Marin
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Bank of Marin 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 Bank of Marin 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 Bank of Marin, you can compare the effects of market volatilities on Citizens Financial and Bank of Marin 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 Bank of Marin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Bank of Marin.
Diversification Opportunities for Citizens Financial and Bank of Marin
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citizens and Bank is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Bank of Marin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Marin 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 Bank of Marin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Marin has no effect on the direction of Citizens Financial i.e., Citizens Financial and Bank of Marin go up and down completely randomly.
Pair Corralation between Citizens Financial and Bank of Marin
Assuming the 90 days trading horizon Citizens Financial Group is expected to generate 0.67 times more return on investment than Bank of Marin. However, Citizens Financial Group is 1.5 times less risky than Bank of Marin. It trades about 0.03 of its potential returns per unit of risk. Bank of Marin is currently generating about 0.0 per unit of risk. If you would invest 1,774 in Citizens Financial Group on August 28, 2024 and sell it today you would earn a total of 330.00 from holding Citizens Financial Group or generate 18.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group vs. Bank of Marin
Performance |
| Timeline |
| Citizens Financial |
| Bank of Marin |
Citizens Financial and Bank of Marin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Bank of Marin
The main advantage of trading using opposite Citizens Financial and Bank of Marin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Bank of Marin 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 Bank of Marin will offset losses from the drop in Bank of Marin's long position.| Citizens Financial vs. Capital One Financial | Citizens Financial vs. Capital One Financial | Citizens Financial vs. Bank of America |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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