Correlation Between Citizens Financial and ChoiceOne Financial
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and ChoiceOne 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 ChoiceOne 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 ChoiceOne Financial Services, you can compare the effects of market volatilities on Citizens Financial and ChoiceOne 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 ChoiceOne Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and ChoiceOne Financial.
Diversification Opportunities for Citizens Financial and ChoiceOne Financial
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citizens and ChoiceOne is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and ChoiceOne Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChoiceOne 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 ChoiceOne Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChoiceOne Financial has no effect on the direction of Citizens Financial i.e., Citizens Financial and ChoiceOne Financial go up and down completely randomly.
Pair Corralation between Citizens Financial and ChoiceOne Financial
Assuming the 90 days trading horizon Citizens Financial Group is expected to under-perform the ChoiceOne Financial. But the preferred stock apears to be less risky and, when comparing its historical volatility, Citizens Financial Group is 2.96 times less risky than ChoiceOne Financial. The preferred stock trades about -0.23 of its potential returns per unit of risk. The ChoiceOne Financial Services is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 3,104 in ChoiceOne Financial Services on August 24, 2024 and sell it today you would earn a total of 546.00 from holding ChoiceOne Financial Services or generate 17.59% 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. ChoiceOne Financial Services
Performance |
| Timeline |
| Citizens Financial |
| ChoiceOne Financial |
Citizens Financial and ChoiceOne Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and ChoiceOne Financial
The main advantage of trading using opposite Citizens Financial and ChoiceOne Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, ChoiceOne 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 ChoiceOne Financial will offset losses from the drop in ChoiceOne 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 |
| ChoiceOne Financial vs. Home Federal Bancorp | ChoiceOne Financial vs. First Northwest Bancorp | ChoiceOne Financial vs. Lake Shore Bancorp | ChoiceOne Financial vs. Affinity Bancshares |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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