Correlation Between Citizens Financial and Security Federal
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Security Federal 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 Security Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Financial Corp and Security Federal, you can compare the effects of market volatilities on Citizens Financial and Security Federal 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 Security Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Security Federal.
Diversification Opportunities for Citizens Financial and Security Federal
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citizens and Security is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Corp and Security Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Federal 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 Corp are associated (or correlated) with Security Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Federal has no effect on the direction of Citizens Financial i.e., Citizens Financial and Security Federal go up and down completely randomly.
Pair Corralation between Citizens Financial and Security Federal
Given the investment horizon of 90 days Citizens Financial Corp is expected to generate 2.19 times more return on investment than Security Federal. However, Citizens Financial is 2.19 times more volatile than Security Federal. It trades about 0.12 of its potential returns per unit of risk. Security Federal is currently generating about 0.15 per unit of risk. If you would invest 1,812 in Citizens Financial Corp on September 3, 2024 and sell it today you would earn a total of 788.00 from holding Citizens Financial Corp or generate 43.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.03% |
| Values | Daily Returns |
Citizens Financial Corp vs. Security Federal
Performance |
| Timeline |
| Citizens Financial Corp |
| Security Federal |
Citizens Financial and Security Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Security Federal
The main advantage of trading using opposite Citizens Financial and Security Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Security Federal 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 Security Federal will offset losses from the drop in Security Federal's long position.| Citizens Financial vs. First Hawaiian | Citizens Financial vs. Central Pacific Financial | Citizens Financial vs. Territorial Bancorp | Citizens Financial vs. Comerica |
| Security Federal vs. MF Bancorp | Security Federal vs. Merchants Marine Bancorp | Security Federal vs. MNB Holdings Corp | Security Federal vs. United Bancorporation of |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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