Correlation Between Citizens Financial and Old National
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Old National 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 Old National 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 Old National Bancorp, you can compare the effects of market volatilities on Citizens Financial and Old National 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 Old National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Old National.
Diversification Opportunities for Citizens Financial and Old National
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citizens and Old is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Old National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old National 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 Old National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old National Bancorp has no effect on the direction of Citizens Financial i.e., Citizens Financial and Old National go up and down completely randomly.
Pair Corralation between Citizens Financial and Old National
Assuming the 90 days trading horizon Citizens Financial is expected to generate 2.29 times less return on investment than Old National. In addition to that, Citizens Financial is 1.25 times more volatile than Old National Bancorp. It trades about 0.05 of its total potential returns per unit of risk. Old National Bancorp is currently generating about 0.14 per unit of volatility. If you would invest 2,488 in Old National Bancorp on September 2, 2024 and sell it today you would earn a total of 72.00 from holding Old National Bancorp or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group vs. Old National Bancorp
Performance |
| Timeline |
| Citizens Financial |
| Old National Bancorp |
Citizens Financial and Old National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Old National
The main advantage of trading using opposite Citizens Financial and Old National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Old National 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 Old National will offset losses from the drop in Old National's long position.| Citizens Financial vs. KeyCorp | Citizens Financial vs. KeyCorp | Citizens Financial vs. Fifth Third Bancorp | Citizens Financial vs. Regions Financial |
| Old National vs. Old National Bancorp | Old National vs. Pinnacle Financial Partners | Old National vs. Heartland Financial USA | Old National vs. OceanFirst Financial Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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