Correlation Between Western Asset and Citizens Bancorp
Can any of the company-specific risk be diversified away by investing in both Western Asset and Citizens Bancorp 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 Western Asset and Citizens Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Global and Citizens Bancorp of, you can compare the effects of market volatilities on Western Asset and Citizens Bancorp 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 Western Asset with a short position of Citizens Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Citizens Bancorp.
Diversification Opportunities for Western Asset and Citizens Bancorp
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Citizens is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and Citizens Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Bancorp and Western Asset 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 Western Asset Global are associated (or correlated) with Citizens Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Bancorp has no effect on the direction of Western Asset i.e., Western Asset and Citizens Bancorp go up and down completely randomly.
Pair Corralation between Western Asset and Citizens Bancorp
Considering the 90-day investment horizon Western Asset is expected to generate 1.33 times less return on investment than Citizens Bancorp. But when comparing it to its historical volatility, Western Asset Global is 3.44 times less risky than Citizens Bancorp. It trades about 0.05 of its potential returns per unit of risk. Citizens Bancorp of is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,920 in Citizens Bancorp of on September 4, 2024 and sell it today you would earn a total of 180.00 from holding Citizens Bancorp of or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 75.07% |
| Values | Daily Returns |
Western Asset Global vs. Citizens Bancorp of
Performance |
| Timeline |
| Western Asset Global |
| Citizens Bancorp |
Western Asset and Citizens Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Citizens Bancorp
The main advantage of trading using opposite Western Asset and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Citizens Bancorp 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 Bancorp will offset losses from the drop in Citizens Bancorp's long position.| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
| Citizens Bancorp vs. Western Asset Global | Citizens Bancorp vs. Invesco Trust For | Citizens Bancorp vs. Logan Ridge Finance | Citizens Bancorp vs. Invesco Advantage MIT |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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