Correlation Between First Citizens and CullenFrost Bankers
Can any of the company-specific risk be diversified away by investing in both First Citizens and CullenFrost Bankers 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 First Citizens and CullenFrost Bankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Citizens BancShares and CullenFrost Bankers, you can compare the effects of market volatilities on First Citizens and CullenFrost Bankers 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 First Citizens with a short position of CullenFrost Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Citizens and CullenFrost Bankers.
Diversification Opportunities for First Citizens and CullenFrost Bankers
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and CullenFrost is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding First Citizens BancShares and CullenFrost Bankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CullenFrost Bankers and First 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 First Citizens BancShares are associated (or correlated) with CullenFrost Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CullenFrost Bankers has no effect on the direction of First Citizens i.e., First Citizens and CullenFrost Bankers go up and down completely randomly.
Pair Corralation between First Citizens and CullenFrost Bankers
Assuming the 90 days horizon First Citizens BancShares is expected to generate 0.86 times more return on investment than CullenFrost Bankers. However, First Citizens BancShares is 1.16 times less risky than CullenFrost Bankers. It trades about 0.06 of its potential returns per unit of risk. CullenFrost Bankers is currently generating about 0.02 per unit of risk. If you would invest 1,759 in First Citizens BancShares on September 3, 2024 and sell it today you would earn a total of 631.00 from holding First Citizens BancShares or generate 35.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Citizens BancShares vs. CullenFrost Bankers
Performance |
| Timeline |
| First Citizens BancShares |
| CullenFrost Bankers |
First Citizens and CullenFrost Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Citizens and CullenFrost Bankers
The main advantage of trading using opposite First Citizens and CullenFrost Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Citizens position performs unexpectedly, CullenFrost Bankers 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 CullenFrost Bankers will offset losses from the drop in CullenFrost Bankers' long position.| First Citizens vs. Fifth Third Bancorp | First Citizens vs. Dime Community Bancshares | First Citizens vs. Fifth Third Bancorp | First Citizens vs. Northern Trust |
| CullenFrost Bankers vs. Truist Financial | CullenFrost Bankers vs. Citizens Financial Group | CullenFrost Bankers vs. Bank of America | CullenFrost Bankers vs. US Bancorp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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