Correlation Between Citizens Financial and First Horizon
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and First Horizon 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 Horizon 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 Horizon National, you can compare the effects of market volatilities on Citizens Financial and First Horizon 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 Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and First Horizon.
Diversification Opportunities for Citizens Financial and First Horizon
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citizens and First is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and First Horizon National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon National 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 Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon National has no effect on the direction of Citizens Financial i.e., Citizens Financial and First Horizon go up and down completely randomly.
Pair Corralation between Citizens Financial and First Horizon
Assuming the 90 days trading horizon Citizens Financial Group is expected to under-perform the First Horizon. But the preferred stock apears to be less risky and, when comparing its historical volatility, Citizens Financial Group is 3.75 times less risky than First Horizon. The preferred stock trades about -0.15 of its potential returns per unit of risk. The First Horizon National is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,738 in First Horizon National on August 28, 2024 and sell it today you would earn a total of 404.00 from holding First Horizon National or generate 23.25% 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. First Horizon National
Performance |
| Timeline |
| Citizens Financial |
| First Horizon National |
Citizens Financial and First Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and First Horizon
The main advantage of trading using opposite Citizens Financial and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, First Horizon 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 Horizon will offset losses from the drop in First Horizon's long position.| Citizens Financial vs. Capital One Financial | Citizens Financial vs. Capital One Financial | Citizens Financial vs. Bank of America |
| First Horizon vs. Zions Bancorporation | First Horizon vs. KeyCorp | First Horizon vs. Comerica | First Horizon 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |