Correlation Between Citizens Financial and NSTS Bancorp
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and NSTS Bancorp 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 NSTS Bancorp 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 NSTS Bancorp, you can compare the effects of market volatilities on Citizens Financial and NSTS Bancorp 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 NSTS Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and NSTS Bancorp.
Diversification Opportunities for Citizens Financial and NSTS Bancorp
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citizens and NSTS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, and NSTS Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTS 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 NSTS Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTS Bancorp has no effect on the direction of Citizens Financial i.e., Citizens Financial and NSTS Bancorp go up and down completely randomly.
Pair Corralation between Citizens Financial and NSTS Bancorp
Assuming the 90 days trading horizon Citizens Financial is expected to generate 63.56 times less return on investment than NSTS Bancorp. But when comparing it to its historical volatility, Citizens Financial Group, is 1.89 times less risky than NSTS Bancorp. It trades about 0.0 of its potential returns per unit of risk. NSTS Bancorp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,107 in NSTS Bancorp on September 3, 2024 and sell it today you would earn a total of 12.00 from holding NSTS Bancorp or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group, vs. NSTS Bancorp
Performance |
| Timeline |
| Citizens Financial Group, |
| NSTS Bancorp |
Citizens Financial and NSTS Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and NSTS Bancorp
The main advantage of trading using opposite Citizens Financial and NSTS Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, NSTS Bancorp 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 NSTS Bancorp will offset losses from the drop in NSTS Bancorp's long position.| Citizens Financial vs. Axos Financial | Citizens Financial vs. Byline Bancorp | Citizens Financial vs. KB Financial Group | Citizens Financial vs. Nu Holdings |
| NSTS Bancorp vs. JPMorgan Chase Co | NSTS Bancorp vs. Citigroup | NSTS Bancorp vs. Wells Fargo | NSTS Bancorp vs. Toronto Dominion Bank |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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