Correlation Between Citizens Financial and Equitable Holdings
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Equitable Holdings 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 Equitable Holdings 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 Equitable Holdings, you can compare the effects of market volatilities on Citizens Financial and Equitable Holdings 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 Equitable Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Equitable Holdings.
Diversification Opportunities for Citizens Financial and Equitable Holdings
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citizens and Equitable is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Holdings 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 Equitable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Holdings has no effect on the direction of Citizens Financial i.e., Citizens Financial and Equitable Holdings go up and down completely randomly.
Pair Corralation between Citizens Financial and Equitable Holdings
Assuming the 90 days trading horizon Citizens Financial is expected to generate 1.05 times less return on investment than Equitable Holdings. In addition to that, Citizens Financial is 1.48 times more volatile than Equitable Holdings. It trades about 0.03 of its total potential returns per unit of risk. Equitable Holdings is currently generating about 0.04 per unit of volatility. If you would invest 1,820 in Equitable Holdings on August 27, 2024 and sell it today you would earn a total of 409.00 from holding Equitable Holdings or generate 22.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group vs. Equitable Holdings
Performance |
| Timeline |
| Citizens Financial |
| Equitable Holdings |
Citizens Financial and Equitable Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Equitable Holdings
The main advantage of trading using opposite Citizens Financial and Equitable Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Equitable Holdings 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 Equitable Holdings will offset losses from the drop in Equitable Holdings' long position.| Citizens Financial vs. Capital One Financial | Citizens Financial vs. Capital One Financial | Citizens Financial vs. Bank of America |
| Equitable Holdings vs. Capital One Financial | Equitable Holdings vs. Citizens Financial Group | Equitable Holdings vs. Equitable Holdings | Equitable Holdings vs. MetLife Preferred Stock |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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