Correlation Between Citizens Financial and Meta Financial
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Meta 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 Citizens Financial and Meta Financial 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 Meta Financial Group, you can compare the effects of market volatilities on Citizens Financial and Meta 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 Citizens Financial with a short position of Meta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Meta Financial.
Diversification Opportunities for Citizens Financial and Meta Financial
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citizens and Meta is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Meta Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Financial Group 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 Meta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Financial Group has no effect on the direction of Citizens Financial i.e., Citizens Financial and Meta Financial go up and down completely randomly.
Pair Corralation between Citizens Financial and Meta Financial
Assuming the 90 days trading horizon Citizens Financial is expected to generate 18.43 times less return on investment than Meta Financial. But when comparing it to its historical volatility, Citizens Financial Group is 1.84 times less risky than Meta Financial. It trades about 0.02 of its potential returns per unit of risk. Meta Financial Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 5,071 in Meta Financial Group on August 27, 2024 and sell it today you would earn a total of 3,219 from holding Meta Financial Group or generate 63.48% 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. Meta Financial Group
Performance |
| Timeline |
| Citizens Financial |
| Meta Financial Group |
Citizens Financial and Meta Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Meta Financial
The main advantage of trading using opposite Citizens Financial and Meta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Meta 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 Meta Financial will offset losses from the drop in Meta Financial's long position.| Citizens Financial vs. Capital One Financial | Citizens Financial vs. Capital One Financial | Citizens Financial vs. Bank of America |
| Meta Financial vs. Capitol Federal Financial | Meta Financial vs. Colony Bankcorp | Meta Financial vs. First Mid Illinois | Meta Financial vs. Meridian Bank |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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