Correlation Between Citizens Financial and Ohio Valley
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Ohio Valley 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 Ohio Valley 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 Ohio Valley Banc, you can compare the effects of market volatilities on Citizens Financial and Ohio Valley 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 Ohio Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Ohio Valley.
Diversification Opportunities for Citizens Financial and Ohio Valley
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citizens and Ohio is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Ohio Valley Banc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ohio Valley Banc 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 Ohio Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ohio Valley Banc has no effect on the direction of Citizens Financial i.e., Citizens Financial and Ohio Valley go up and down completely randomly.
Pair Corralation between Citizens Financial and Ohio Valley
Assuming the 90 days trading horizon Citizens Financial is expected to generate 75.81 times less return on investment than Ohio Valley. But when comparing it to its historical volatility, Citizens Financial Group is 92.67 times less risky than Ohio Valley. It trades about 0.1 of its potential returns per unit of risk. Ohio Valley Banc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,288 in Ohio Valley Banc on August 29, 2024 and sell it today you would earn a total of 412.00 from holding Ohio Valley Banc or generate 18.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Citizens Financial Group vs. Ohio Valley Banc
Performance |
| Timeline |
| Citizens Financial |
| Ohio Valley Banc |
Citizens Financial and Ohio Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Ohio Valley
The main advantage of trading using opposite Citizens Financial and Ohio Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Ohio Valley 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 Ohio Valley will offset losses from the drop in Ohio Valley'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 |
| Ohio Valley vs. Home Federal Bancorp | Ohio Valley vs. Lake Shore Bancorp | Ohio Valley vs. Community West Bancshares | Ohio Valley vs. Magyar 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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