Correlation Between Citizens Financial and Itau Unibanco
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Itau Unibanco 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 Itau Unibanco 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 Itau Unibanco Banco, you can compare the effects of market volatilities on Citizens Financial and Itau Unibanco 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 Itau Unibanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Itau Unibanco.
Diversification Opportunities for Citizens Financial and Itau Unibanco
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citizens and Itau is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Itau Unibanco Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itau Unibanco Banco 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 Itau Unibanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itau Unibanco Banco has no effect on the direction of Citizens Financial i.e., Citizens Financial and Itau Unibanco go up and down completely randomly.
Pair Corralation between Citizens Financial and Itau Unibanco
Assuming the 90 days trading horizon Citizens Financial Group is expected to under-perform the Itau Unibanco. But the preferred stock apears to be less risky and, when comparing its historical volatility, Citizens Financial Group is 2.18 times less risky than Itau Unibanco. The preferred stock trades about -0.05 of its potential returns per unit of risk. The Itau Unibanco Banco is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 566.00 in Itau Unibanco Banco on November 30, 2024 and sell it today you would lose (2.00) from holding Itau Unibanco Banco or give up 0.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Citizens Financial Group vs. Itau Unibanco Banco
Performance |
Timeline |
Citizens Financial |
Itau Unibanco Banco |
Citizens Financial and Itau Unibanco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citizens Financial and Itau Unibanco
The main advantage of trading using opposite Citizens Financial and Itau Unibanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Itau Unibanco 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 Itau Unibanco will offset losses from the drop in Itau Unibanco'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 |
Itau Unibanco vs. Grupo Financiero Galicia | ||
Itau Unibanco vs. Banco Macro SA | ||
Itau Unibanco vs. Banco Santander Brasil | ||
Itau Unibanco vs. Lloyds Banking Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |