Correlation Between Citizens Financial and Zions Bancorporation
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Zions Bancorporation 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 Zions Bancorporation 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 Zions Bancorporation, you can compare the effects of market volatilities on Citizens Financial and Zions Bancorporation 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 Zions Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Zions Bancorporation.
Diversification Opportunities for Citizens Financial and Zions Bancorporation
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citizens and Zions is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Zions Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zions Bancorporation 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 Zions Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zions Bancorporation has no effect on the direction of Citizens Financial i.e., Citizens Financial and Zions Bancorporation go up and down completely randomly.
Pair Corralation between Citizens Financial and Zions Bancorporation
Assuming the 90 days trading horizon Citizens Financial Group is expected to generate 0.78 times more return on investment than Zions Bancorporation. However, Citizens Financial Group is 1.29 times less risky than Zions Bancorporation. It trades about 0.12 of its potential returns per unit of risk. Zions Bancorporation is currently generating about -0.1 per unit of risk. If you would invest 1,988 in Citizens Financial Group on November 18, 2024 and sell it today you would earn a total of 54.00 from holding Citizens Financial Group or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group vs. Zions Bancorp.
Performance |
| Timeline |
| Citizens Financial |
| Zions Bancorporation |
Citizens Financial and Zions Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Zions Bancorporation
The main advantage of trading using opposite Citizens Financial and Zions Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Zions Bancorporation 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 Zions Bancorporation will offset losses from the drop in Zions Bancorporation's long position.| Citizens Financial vs. Pinnacle Financial Partners | Citizens Financial vs. Dime Community Bancshares | Citizens Financial vs. Wintrust Financial Corp |
| Zions Bancorporation vs. KeyCorp | Zions Bancorporation vs. Comerica | Zions Bancorporation vs. First Horizon National | Zions Bancorporation vs. Western Alliance Bancorporation |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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