Correlation Between Israel Discount and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Israel Discount and Citizens Financial 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 Israel Discount and Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Discount Bank and Citizens Financial Corp, you can compare the effects of market volatilities on Israel Discount and Citizens Financial 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 Israel Discount with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Citizens Financial.
Diversification Opportunities for Israel Discount and Citizens Financial
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Israel and Citizens is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Citizens Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Corp and Israel Discount 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 Israel Discount Bank are associated (or correlated) with Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Corp has no effect on the direction of Israel Discount i.e., Israel Discount and Citizens Financial go up and down completely randomly.
Pair Corralation between Israel Discount and Citizens Financial
If you would invest 2,345 in Citizens Financial Corp on September 1, 2024 and sell it today you would earn a total of 255.00 from holding Citizens Financial Corp or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Discount Bank vs. Citizens Financial Corp
Performance |
| Timeline |
| Israel Discount Bank |
| Citizens Financial Corp |
Israel Discount and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Citizens Financial
The main advantage of trading using opposite Israel Discount and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Citizens Financial 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 Financial will offset losses from the drop in Citizens Financial's long position.| Israel Discount vs. Piraeus Bank SA | Israel Discount vs. Turkiye Garanti Bankasi | Israel Discount vs. Delhi Bank Corp | Israel Discount vs. Uwharrie Capital Corp |
| Citizens Financial vs. Century Next Financial | Citizens Financial vs. Triad Business Bank | Citizens Financial vs. First Ottawa Bancshares | Citizens Financial vs. First Community Financial |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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