Correlation Between Citizens Financial and Magyar Bancorp
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Magyar 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 Magyar 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 Magyar Bancorp, you can compare the effects of market volatilities on Citizens Financial and Magyar 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 Magyar Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Magyar Bancorp.
Diversification Opportunities for Citizens Financial and Magyar Bancorp
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citizens and Magyar is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Magyar Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magyar 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 Magyar Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magyar Bancorp has no effect on the direction of Citizens Financial i.e., Citizens Financial and Magyar Bancorp go up and down completely randomly.
Pair Corralation between Citizens Financial and Magyar Bancorp
Assuming the 90 days trading horizon Citizens Financial Group is expected to under-perform the Magyar Bancorp. In addition to that, Citizens Financial is 1.25 times more volatile than Magyar Bancorp. It trades about -0.15 of its total potential returns per unit of risk. Magyar Bancorp is currently generating about 0.43 per unit of volatility. If you would invest 1,232 in Magyar Bancorp on August 28, 2024 and sell it today you would earn a total of 93.00 from holding Magyar Bancorp or generate 7.55% 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. Magyar Bancorp
Performance |
| Timeline |
| Citizens Financial |
| Magyar Bancorp |
Citizens Financial and Magyar Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Magyar Bancorp
The main advantage of trading using opposite Citizens Financial and Magyar Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Magyar 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 Magyar Bancorp will offset losses from the drop in Magyar Bancorp's long position.| Citizens Financial vs. Capital One Financial | Citizens Financial vs. Capital One Financial | Citizens Financial vs. Bank of America |
| Magyar Bancorp vs. Home Federal Bancorp | Magyar Bancorp vs. Community West Bancshares | Magyar Bancorp vs. First Financial Northwest | Magyar Bancorp vs. First Northwest 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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