Correlation Between Citizens Financial and Premier Financial
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Premier 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 Premier 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 Premier Financial Corp, you can compare the effects of market volatilities on Citizens Financial and Premier 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 Premier Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Premier Financial.
Diversification Opportunities for Citizens Financial and Premier Financial
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citizens and Premier is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Premier Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier 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 Premier Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Financial Corp has no effect on the direction of Citizens Financial i.e., Citizens Financial and Premier Financial go up and down completely randomly.
Pair Corralation between Citizens Financial and Premier Financial
Assuming the 90 days trading horizon Citizens Financial Group is expected to under-perform the Premier Financial. But the preferred stock apears to be less risky and, when comparing its historical volatility, Citizens Financial Group is 3.44 times less risky than Premier Financial. The preferred stock trades about -0.22 of its potential returns per unit of risk. The Premier Financial Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,469 in Premier Financial Corp on August 29, 2024 and sell it today you would earn a total of 319.00 from holding Premier Financial Corp or generate 12.92% 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. Premier Financial Corp
Performance |
| Timeline |
| Citizens Financial |
| Premier Financial Corp |
Citizens Financial and Premier Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Premier Financial
The main advantage of trading using opposite Citizens Financial and Premier Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Premier 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 Premier Financial will offset losses from the drop in Premier 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 |
| Premier Financial vs. Bankwell Financial Group | Premier Financial vs. Middlefield Banc | Premier Financial vs. Civista Bancshares | Premier Financial vs. Primis 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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