Correlation Between Citizens Financial and Sterling Bancorp
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Sterling 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 Sterling 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 Sterling Bancorp, you can compare the effects of market volatilities on Citizens Financial and Sterling 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 Sterling Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Sterling Bancorp.
Diversification Opportunities for Citizens Financial and Sterling Bancorp
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citizens and Sterling is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, and Sterling Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling 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 Sterling Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Bancorp has no effect on the direction of Citizens Financial i.e., Citizens Financial and Sterling Bancorp go up and down completely randomly.
Pair Corralation between Citizens Financial and Sterling Bancorp
Assuming the 90 days trading horizon Citizens Financial Group, is expected to generate 0.19 times more return on investment than Sterling Bancorp. However, Citizens Financial Group, is 5.38 times less risky than Sterling Bancorp. It trades about 0.16 of its potential returns per unit of risk. Sterling Bancorp is currently generating about -0.01 per unit of risk. If you would invest 2,455 in Citizens Financial Group, on August 30, 2024 and sell it today you would earn a total of 236.00 from holding Citizens Financial Group, or generate 9.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 27.22% |
| Values | Daily Returns |
Citizens Financial Group, vs. Sterling Bancorp
Performance |
| Timeline |
| Citizens Financial Group, |
| Sterling Bancorp |
Citizens Financial and Sterling Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Sterling Bancorp
The main advantage of trading using opposite Citizens Financial and Sterling Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Sterling 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 Sterling Bancorp will offset losses from the drop in Sterling 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 |
| Sterling Bancorp vs. Home Federal Bancorp | Sterling Bancorp vs. Lake Shore Bancorp | Sterling Bancorp vs. Magyar Bancorp | Sterling Bancorp vs. Franklin Financial Services |
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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