Correlation Between Citizens Financial and Colony Bankcorp
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Colony Bankcorp 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 Colony Bankcorp 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 Colony Bankcorp, you can compare the effects of market volatilities on Citizens Financial and Colony Bankcorp 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 Colony Bankcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Colony Bankcorp.
Diversification Opportunities for Citizens Financial and Colony Bankcorp
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citizens and Colony is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Colony Bankcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colony Bankcorp 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 Colony Bankcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colony Bankcorp has no effect on the direction of Citizens Financial i.e., Citizens Financial and Colony Bankcorp go up and down completely randomly.
Pair Corralation between Citizens Financial and Colony Bankcorp
Assuming the 90 days trading horizon Citizens Financial Group is expected to under-perform the Colony Bankcorp. But the preferred stock apears to be less risky and, when comparing its historical volatility, Citizens Financial Group is 3.06 times less risky than Colony Bankcorp. The preferred stock trades about -0.15 of its potential returns per unit of risk. The Colony Bankcorp is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,480 in Colony Bankcorp on August 28, 2024 and sell it today you would earn a total of 277.00 from holding Colony Bankcorp or generate 18.72% 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. Colony Bankcorp
Performance |
| Timeline |
| Citizens Financial |
| Colony Bankcorp |
Citizens Financial and Colony Bankcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Colony Bankcorp
The main advantage of trading using opposite Citizens Financial and Colony Bankcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Colony Bankcorp 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 Colony Bankcorp will offset losses from the drop in Colony Bankcorp's long position.| Citizens Financial vs. Capital One Financial | Citizens Financial vs. Capital One Financial | Citizens Financial vs. Bank of America |
| Colony Bankcorp vs. Home Federal Bancorp | Colony Bankcorp vs. First Financial Northwest | Colony Bankcorp vs. First Northwest Bancorp | Colony Bankcorp vs. First Capital |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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