Correlation Between Ita Unibanco and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Ita Unibanco 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 Ita Unibanco and Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ita Unibanco Holding and Citizens Financial Group,, you can compare the effects of market volatilities on Ita Unibanco 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 Ita Unibanco with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ita Unibanco and Citizens Financial.
Diversification Opportunities for Ita Unibanco and Citizens Financial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ita and Citizens is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ita Unibanco Holding and Citizens Financial Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Group, and Ita Unibanco 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 Ita Unibanco Holding 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 Group, has no effect on the direction of Ita Unibanco i.e., Ita Unibanco and Citizens Financial go up and down completely randomly.
Pair Corralation between Ita Unibanco and Citizens Financial
Assuming the 90 days trading horizon Ita Unibanco Holding is expected to generate 0.96 times more return on investment than Citizens Financial. However, Ita Unibanco Holding is 1.04 times less risky than Citizens Financial. It trades about 0.16 of its potential returns per unit of risk. Citizens Financial Group, is currently generating about 0.13 per unit of risk. If you would invest 3,107 in Ita Unibanco Holding on October 25, 2024 and sell it today you would earn a total of 154.00 from holding Ita Unibanco Holding or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ita Unibanco Holding vs. Citizens Financial Group,
Performance |
| Timeline |
| Ita Unibanco Holding |
| Citizens Financial Group, |
Ita Unibanco and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ita Unibanco and Citizens Financial
The main advantage of trading using opposite Ita Unibanco and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ita Unibanco 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.| Ita Unibanco vs. Banco Bradesco SA | Ita Unibanco vs. Banco do Brasil | Ita Unibanco vs. Vale SA | Ita Unibanco vs. Itasa Investimentos |
| Citizens Financial vs. Jefferies Financial Group | Citizens Financial vs. Warner Music Group | Citizens Financial vs. Synchrony Financial | Citizens Financial vs. SVB Financial Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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