Correlation Between Citizens Financial and First Hawaiian
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and First Hawaiian 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 First Hawaiian 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 First Hawaiian, you can compare the effects of market volatilities on Citizens Financial and First Hawaiian 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 First Hawaiian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and First Hawaiian.
Diversification Opportunities for Citizens Financial and First Hawaiian
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citizens and First is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and First Hawaiian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hawaiian 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 First Hawaiian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hawaiian has no effect on the direction of Citizens Financial i.e., Citizens Financial and First Hawaiian go up and down completely randomly.
Pair Corralation between Citizens Financial and First Hawaiian
Assuming the 90 days trading horizon Citizens Financial Group is expected to under-perform the First Hawaiian. But the preferred stock apears to be less risky and, when comparing its historical volatility, Citizens Financial Group is 3.04 times less risky than First Hawaiian. The preferred stock trades about -0.23 of its potential returns per unit of risk. The First Hawaiian is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,373 in First Hawaiian on August 26, 2024 and sell it today you would earn a total of 417.00 from holding First Hawaiian or generate 17.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group vs. First Hawaiian
Performance |
| Timeline |
| Citizens Financial |
| First Hawaiian |
Citizens Financial and First Hawaiian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and First Hawaiian
The main advantage of trading using opposite Citizens Financial and First Hawaiian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, First Hawaiian 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 First Hawaiian will offset losses from the drop in First Hawaiian'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 |
| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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