Correlation Between CIT Group and Old National
Can any of the company-specific risk be diversified away by investing in both CIT Group and Old National 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 CIT Group and Old National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIT Group Preferred and Old National Bancorp, you can compare the effects of market volatilities on CIT Group and Old National 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 CIT Group with a short position of Old National. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIT Group and Old National.
Diversification Opportunities for CIT Group and Old National
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CIT and Old is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CIT Group Preferred and Old National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old National Bancorp and CIT Group 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 CIT Group Preferred are associated (or correlated) with Old National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old National Bancorp has no effect on the direction of CIT Group i.e., CIT Group and Old National go up and down completely randomly.
Pair Corralation between CIT Group and Old National
Assuming the 90 days horizon CIT Group Preferred is expected to under-perform the Old National. In addition to that, CIT Group is 1.12 times more volatile than Old National Bancorp. It trades about 0.0 of its total potential returns per unit of risk. Old National Bancorp is currently generating about 0.15 per unit of volatility. If you would invest 2,490 in Old National Bancorp on August 27, 2024 and sell it today you would earn a total of 71.00 from holding Old National Bancorp or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIT Group Preferred vs. Old National Bancorp
Performance |
| Timeline |
| CIT Group Preferred |
| Old National Bancorp |
CIT Group and Old National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIT Group and Old National
The main advantage of trading using opposite CIT Group and Old National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIT Group position performs unexpectedly, Old National 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 Old National will offset losses from the drop in Old National's long position.| CIT Group vs. First Citizens BancShares | CIT Group vs. Texas Capital Bancshares | CIT Group vs. Dime Community Bancshares | CIT Group vs. Fifth Third Bancorp |
| Old National vs. Capital One Financial | Old National vs. Capital One Financial | Old National vs. Bank of America |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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