Correlation Between Citizens Financial and Grupo Financiero
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Grupo Financiero 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 Grupo Financiero 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 Grupo Financiero Galicia, you can compare the effects of market volatilities on Citizens Financial and Grupo Financiero 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 Grupo Financiero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Grupo Financiero.
Diversification Opportunities for Citizens Financial and Grupo Financiero
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citizens and Grupo is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Grupo Financiero Galicia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Financiero Galicia 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 Grupo Financiero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Financiero Galicia has no effect on the direction of Citizens Financial i.e., Citizens Financial and Grupo Financiero go up and down completely randomly.
Pair Corralation between Citizens Financial and Grupo Financiero
Assuming the 90 days trading horizon Citizens Financial Group is expected to under-perform the Grupo Financiero. But the preferred stock apears to be less risky and, when comparing its historical volatility, Citizens Financial Group is 2.71 times less risky than Grupo Financiero. The preferred stock trades about -0.02 of its potential returns per unit of risk. The Grupo Financiero Galicia is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 5,828 in Grupo Financiero Galicia on December 7, 2024 and sell it today you would lose (146.00) from holding Grupo Financiero Galicia or give up 2.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group vs. Grupo Financiero Galicia
Performance |
| Timeline |
| Citizens Financial |
| Grupo Financiero Galicia |
Citizens Financial and Grupo Financiero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Grupo Financiero
The main advantage of trading using opposite Citizens Financial and Grupo Financiero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Grupo Financiero 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 Grupo Financiero will offset losses from the drop in Grupo Financiero's long position.| Citizens Financial vs. Capital One Financial | ||
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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