Correlation Between Citizens Financial and Columbia Financial
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Columbia 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 Columbia 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 Columbia Financial, you can compare the effects of market volatilities on Citizens Financial and Columbia 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 Columbia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Columbia Financial.
Diversification Opportunities for Citizens Financial and Columbia Financial
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citizens and Columbia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Columbia Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Financial 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 Columbia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Financial has no effect on the direction of Citizens Financial i.e., Citizens Financial and Columbia Financial go up and down completely randomly.
Pair Corralation between Citizens Financial and Columbia Financial
Assuming the 90 days trading horizon Citizens Financial Group is expected to generate 0.69 times more return on investment than Columbia Financial. However, Citizens Financial Group is 1.44 times less risky than Columbia Financial. It trades about 0.04 of its potential returns per unit of risk. Columbia Financial is currently generating about 0.0 per unit of risk. If you would invest 1,806 in Citizens Financial Group on August 31, 2024 and sell it today you would earn a total of 333.00 from holding Citizens Financial Group or generate 18.44% 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. Columbia Financial
Performance |
| Timeline |
| Citizens Financial |
| Columbia Financial |
Citizens Financial and Columbia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Columbia Financial
The main advantage of trading using opposite Citizens Financial and Columbia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Columbia 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 Columbia Financial will offset losses from the drop in Columbia Financial'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 |
| Columbia Financial vs. KeyCorp | Columbia Financial vs. Comerica | Columbia Financial vs. First Horizon National | Columbia Financial vs. Western Alliance Bancorporation |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |