Correlation Between Citizens Financial and International Bancshares
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and International Bancshares 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 International Bancshares 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 International Bancshares, you can compare the effects of market volatilities on Citizens Financial and International Bancshares 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 International Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and International Bancshares.
Diversification Opportunities for Citizens Financial and International Bancshares
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citizens and International is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, and International Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Bancshares 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 International Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Bancshares has no effect on the direction of Citizens Financial i.e., Citizens Financial and International Bancshares go up and down completely randomly.
Pair Corralation between Citizens Financial and International Bancshares
Considering the 90-day investment horizon Citizens Financial is expected to generate 1.31 times less return on investment than International Bancshares. But when comparing it to its historical volatility, Citizens Financial Group, is 1.07 times less risky than International Bancshares. It trades about 0.18 of its potential returns per unit of risk. International Bancshares is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 6,164 in International Bancshares on September 4, 2024 and sell it today you would earn a total of 1,043 from holding International Bancshares or generate 16.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group, vs. International Bancshares
Performance |
| Timeline |
| Citizens Financial Group, |
| International Bancshares |
Citizens Financial and International Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and International Bancshares
The main advantage of trading using opposite Citizens Financial and International Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, International Bancshares 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 International Bancshares will offset losses from the drop in International Bancshares' long position.| Citizens Financial vs. International Bancshares | Citizens Financial vs. Finward Bancorp | Citizens Financial vs. Aquagold International | Citizens Financial vs. Thrivent High Yield |
| International Bancshares vs. Home Federal Bancorp | International Bancshares vs. First Financial Northwest | International Bancshares vs. First Northwest Bancorp | International Bancshares vs. First Capital |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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