Correlation Between Citizens Financial and Peapack Gladstone
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Peapack Gladstone 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 Peapack Gladstone 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 Peapack Gladstone Financial, you can compare the effects of market volatilities on Citizens Financial and Peapack Gladstone 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 Peapack Gladstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Peapack Gladstone.
Diversification Opportunities for Citizens Financial and Peapack Gladstone
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citizens and Peapack is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Peapack Gladstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peapack Gladstone 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 Peapack Gladstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peapack Gladstone has no effect on the direction of Citizens Financial i.e., Citizens Financial and Peapack Gladstone go up and down completely randomly.
Pair Corralation between Citizens Financial and Peapack Gladstone
Assuming the 90 days trading horizon Citizens Financial Group is expected to generate 0.72 times more return on investment than Peapack Gladstone. However, Citizens Financial Group is 1.39 times less risky than Peapack Gladstone. It trades about 0.03 of its potential returns per unit of risk. Peapack Gladstone Financial is currently generating about 0.01 per unit of risk. If you would invest 1,787 in Citizens Financial Group on August 30, 2024 and sell it today you would earn a total of 279.00 from holding Citizens Financial Group or generate 15.61% 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. Peapack Gladstone Financial
Performance |
| Timeline |
| Citizens Financial |
| Peapack Gladstone |
Citizens Financial and Peapack Gladstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Peapack Gladstone
The main advantage of trading using opposite Citizens Financial and Peapack Gladstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Peapack Gladstone 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 Peapack Gladstone will offset losses from the drop in Peapack Gladstone'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 |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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