Correlation Between Citizens and Impax Environmental
Can any of the company-specific risk be diversified away by investing in both Citizens and Impax Environmental 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 Impax Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and Impax Environmental Markets, you can compare the effects of market volatilities on Citizens and Impax Environmental 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 Impax Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and Impax Environmental.
Diversification Opportunities for Citizens and Impax Environmental
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citizens and Impax is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and Impax Environmental Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Environmental 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 Impax Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Environmental has no effect on the direction of Citizens i.e., Citizens and Impax Environmental go up and down completely randomly.
Pair Corralation between Citizens and Impax Environmental
Considering the 90-day investment horizon Citizens is expected to generate 4.06 times more return on investment than Impax Environmental. However, Citizens is 4.06 times more volatile than Impax Environmental Markets. It trades about 0.04 of its potential returns per unit of risk. Impax Environmental Markets is currently generating about -0.03 per unit of risk. If you would invest 310.00 in Citizens on December 11, 2024 and sell it today you would earn a total of 127.00 from holding Citizens or generate 40.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Citizens vs. Impax Environmental Markets
Performance |
| Timeline |
| Citizens |
| Impax Environmental |
Citizens and Impax Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and Impax Environmental
The main advantage of trading using opposite Citizens and Impax Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens position performs unexpectedly, Impax Environmental 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 Impax Environmental will offset losses from the drop in Impax Environmental's long position.| Citizens vs. CNO Financial Group | ||
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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