Correlation Between Citizens and Better Home
Can any of the company-specific risk be diversified away by investing in both Citizens and Better Home 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 and Better Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and Better Home Finance, you can compare the effects of market volatilities on Citizens and Better Home 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 with a short position of Better Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and Better Home.
Diversification Opportunities for Citizens and Better Home
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citizens and Better is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and Better Home Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better Home Finance and Citizens 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 are associated (or correlated) with Better Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better Home Finance has no effect on the direction of Citizens i.e., Citizens and Better Home go up and down completely randomly.
Pair Corralation between Citizens and Better Home
Considering the 90-day investment horizon Citizens is expected to under-perform the Better Home. But the stock apears to be less risky and, when comparing its historical volatility, Citizens is 1.31 times less risky than Better Home. The stock trades about -0.14 of its potential returns per unit of risk. The Better Home Finance is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,410 in Better Home Finance on September 3, 2024 and sell it today you would earn a total of 167.00 from holding Better Home Finance or generate 11.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens vs. Better Home Finance
Performance |
| Timeline |
| Citizens |
| Better Home Finance |
Citizens and Better Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and Better Home
The main advantage of trading using opposite Citizens and Better Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens position performs unexpectedly, Better Home 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 Better Home will offset losses from the drop in Better Home's long position.| Citizens vs. CNO Financial Group | Citizens vs. Brighthouse Financial | Citizens vs. FG Annuities Life | Citizens vs. Prudential Public Limited |
| Better Home vs. Citizens | Better Home vs. Employers Holdings | Better Home vs. Maanshan Iron Steel | Better Home vs. GoHealth |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |