Correlation Between Citizens Financial and MVB Financial
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and MVB Financial 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 MVB Financial 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 MVB Financial Corp, you can compare the effects of market volatilities on Citizens Financial and MVB Financial 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 MVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and MVB Financial.
Diversification Opportunities for Citizens Financial and MVB Financial
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citizens and MVB is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and MVB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MVB Financial Corp 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 MVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MVB Financial Corp has no effect on the direction of Citizens Financial i.e., Citizens Financial and MVB Financial go up and down completely randomly.
Pair Corralation between Citizens Financial and MVB Financial
Assuming the 90 days trading horizon Citizens Financial Group is expected to under-perform the MVB Financial. But the preferred stock apears to be less risky and, when comparing its historical volatility, Citizens Financial Group is 1.93 times less risky than MVB Financial. The preferred stock trades about -0.2 of its potential returns per unit of risk. The MVB Financial Corp is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,985 in MVB Financial Corp on November 27, 2024 and sell it today you would lose (60.00) from holding MVB Financial Corp or give up 3.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Citizens Financial Group vs. MVB Financial Corp
Performance |
| Timeline |
| Citizens Financial |
| MVB Financial Corp |
Citizens Financial and MVB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and MVB Financial
The main advantage of trading using opposite Citizens Financial and MVB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, MVB Financial 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 MVB Financial will offset losses from the drop in MVB Financial'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 |
| MVB Financial vs. Community West Bancshares | MVB Financial vs. First Financial Northwest | MVB Financial vs. CF Bankshares | MVB Financial vs. Home Federal 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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