Correlation Between Citizens Financial and NBT Bancorp
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and NBT 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 NBT 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 NBT Bancorp, you can compare the effects of market volatilities on Citizens Financial and NBT 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 NBT Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and NBT Bancorp.
Diversification Opportunities for Citizens Financial and NBT Bancorp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citizens and NBT is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and NBT Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBT 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 NBT Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBT Bancorp has no effect on the direction of Citizens Financial i.e., Citizens Financial and NBT Bancorp go up and down completely randomly.
Pair Corralation between Citizens Financial and NBT Bancorp
Assuming the 90 days trading horizon Citizens Financial is expected to generate 6.64 times less return on investment than NBT Bancorp. But when comparing it to its historical volatility, Citizens Financial Group is 2.03 times less risky than NBT Bancorp. It trades about 0.03 of its potential returns per unit of risk. NBT Bancorp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,469 in NBT Bancorp on August 28, 2024 and sell it today you would earn a total of 1,630 from holding NBT Bancorp or generate 46.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group vs. NBT Bancorp
Performance |
| Timeline |
| Citizens Financial |
| NBT Bancorp |
Citizens Financial and NBT Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and NBT Bancorp
The main advantage of trading using opposite Citizens Financial and NBT Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, NBT 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 NBT Bancorp will offset losses from the drop in NBT Bancorp's long position.| Citizens Financial vs. Capital One Financial | Citizens Financial vs. Capital One Financial | Citizens Financial vs. Bank of America |
| NBT Bancorp vs. Oak Valley Bancorp | NBT Bancorp vs. Home Federal Bancorp | NBT Bancorp vs. Finward Bancorp | NBT Bancorp vs. Community West Bancshares |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |