Correlation Between Citizens Financial and Evans Bancorp
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Evans Bancorp 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 Evans Bancorp 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 Evans Bancorp, you can compare the effects of market volatilities on Citizens Financial and Evans Bancorp 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 Evans Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Evans Bancorp.
Diversification Opportunities for Citizens Financial and Evans Bancorp
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citizens and Evans is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Evans Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evans Bancorp 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 Evans Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evans Bancorp has no effect on the direction of Citizens Financial i.e., Citizens Financial and Evans Bancorp go up and down completely randomly.
Pair Corralation between Citizens Financial and Evans Bancorp
Assuming the 90 days trading horizon Citizens Financial is expected to generate 1.31 times less return on investment than Evans Bancorp. In addition to that, Citizens Financial is 1.05 times more volatile than Evans Bancorp. It trades about 0.02 of its total potential returns per unit of risk. Evans Bancorp is currently generating about 0.03 per unit of volatility. If you would invest 3,594 in Evans Bancorp on August 31, 2024 and sell it today you would earn a total of 847.00 from holding Evans Bancorp or generate 23.57% 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. Evans Bancorp
Performance |
| Timeline |
| Citizens Financial |
| Evans Bancorp |
Citizens Financial and Evans Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Evans Bancorp
The main advantage of trading using opposite Citizens Financial and Evans Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Evans Bancorp 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 Evans Bancorp will offset losses from the drop in Evans Bancorp'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 |
| Evans Bancorp vs. First Community | Evans Bancorp vs. Oak Valley Bancorp | Evans Bancorp vs. First Financial Northwest | Evans Bancorp vs. ESSA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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