Correlation Between Dillards Capital and Citizens
Can any of the company-specific risk be diversified away by investing in both Dillards Capital and Citizens 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 Dillards Capital and Citizens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dillards Capital Trust and Citizens, you can compare the effects of market volatilities on Dillards Capital and Citizens 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 Dillards Capital with a short position of Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dillards Capital and Citizens.
Diversification Opportunities for Dillards Capital and Citizens
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dillards and Citizens is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dillards Capital Trust and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens and Dillards Capital 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 Dillards Capital Trust are associated (or correlated) with Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of Dillards Capital i.e., Dillards Capital and Citizens go up and down completely randomly.
Pair Corralation between Dillards Capital and Citizens
Considering the 90-day investment horizon Dillards Capital is expected to generate 13.64 times less return on investment than Citizens. But when comparing it to its historical volatility, Dillards Capital Trust is 7.79 times less risky than Citizens. It trades about 0.3 of its potential returns per unit of risk. Citizens is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 422.00 in Citizens on November 9, 2024 and sell it today you would earn a total of 131.00 from holding Citizens or generate 31.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dillards Capital Trust vs. Citizens
Performance |
| Timeline |
| Dillards Capital Trust |
| Citizens |
Dillards Capital and Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dillards Capital and Citizens
The main advantage of trading using opposite Dillards Capital and Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dillards Capital position performs unexpectedly, Citizens 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 Citizens will offset losses from the drop in Citizens' long position.| Dillards Capital vs. Prudential Financial 4125 | Dillards Capital vs. Credit Enhanced Corts | Dillards Capital vs. Strats Trust Cellular | Dillards Capital vs. Structured Products Corp |
| Citizens vs. CNO Financial Group | Citizens vs. Brighthouse Financial | Citizens vs. FG Annuities Life | Citizens vs. Prudential PLC ADR |
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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