Correlation Between Citizens Financial and OceanFirst Financial
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and OceanFirst 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 OceanFirst 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 OceanFirst Financial Corp, you can compare the effects of market volatilities on Citizens Financial and OceanFirst 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 OceanFirst Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and OceanFirst Financial.
Diversification Opportunities for Citizens Financial and OceanFirst Financial
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citizens and OceanFirst is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and OceanFirst Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanFirst 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 OceanFirst Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanFirst Financial Corp has no effect on the direction of Citizens Financial i.e., Citizens Financial and OceanFirst Financial go up and down completely randomly.
Pair Corralation between Citizens Financial and OceanFirst Financial
Assuming the 90 days trading horizon Citizens Financial is expected to generate 2.83 times less return on investment than OceanFirst Financial. In addition to that, Citizens Financial is 2.92 times more volatile than OceanFirst Financial Corp. It trades about 0.01 of its total potential returns per unit of risk. OceanFirst Financial Corp is currently generating about 0.11 per unit of volatility. If you would invest 2,495 in OceanFirst Financial Corp on September 1, 2024 and sell it today you would earn a total of 25.00 from holding OceanFirst Financial Corp or generate 1.0% 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. OceanFirst Financial Corp
Performance |
| Timeline |
| Citizens Financial |
| OceanFirst Financial Corp |
Citizens Financial and OceanFirst Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and OceanFirst Financial
The main advantage of trading using opposite Citizens Financial and OceanFirst Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, OceanFirst 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 OceanFirst Financial will offset losses from the drop in OceanFirst 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 |
| OceanFirst Financial vs. KeyCorp | OceanFirst Financial vs. KeyCorp | OceanFirst Financial vs. Fifth Third Bancorp | OceanFirst Financial vs. Citizens Financial 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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