Correlation Between Citizens Financial and CullenFrost Bankers
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and CullenFrost Bankers 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 CullenFrost Bankers 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 CullenFrost Bankers, you can compare the effects of market volatilities on Citizens Financial and CullenFrost Bankers 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 CullenFrost Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and CullenFrost Bankers.
Diversification Opportunities for Citizens Financial and CullenFrost Bankers
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citizens and CullenFrost is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and CullenFrost Bankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CullenFrost Bankers 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 CullenFrost Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CullenFrost Bankers has no effect on the direction of Citizens Financial i.e., Citizens Financial and CullenFrost Bankers go up and down completely randomly.
Pair Corralation between Citizens Financial and CullenFrost Bankers
Assuming the 90 days trading horizon Citizens Financial Group is expected to generate 1.1 times more return on investment than CullenFrost Bankers. However, Citizens Financial is 1.1 times more volatile than CullenFrost Bankers. It trades about 0.1 of its potential returns per unit of risk. CullenFrost Bankers is currently generating about 0.08 per unit of risk. If you would invest 1,838 in Citizens Financial Group on August 29, 2024 and sell it today you would earn a total of 228.00 from holding Citizens Financial Group or generate 12.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group vs. CullenFrost Bankers
Performance |
| Timeline |
| Citizens Financial |
| CullenFrost Bankers |
Citizens Financial and CullenFrost Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and CullenFrost Bankers
The main advantage of trading using opposite Citizens Financial and CullenFrost Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, CullenFrost Bankers 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 CullenFrost Bankers will offset losses from the drop in CullenFrost Bankers' long position.| Citizens Financial vs. Capital One Financial | Citizens Financial vs. Capital One Financial | Citizens Financial vs. Bank of America | Citizens Financial vs. KeyCorp |
| CullenFrost Bankers vs. Truist Financial | CullenFrost Bankers vs. Citizens Financial Group | CullenFrost Bankers vs. Bank of America | CullenFrost Bankers vs. US 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Stocks Directory Find actively traded stocks across global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |