Correlation Between NYSE Composite and Citizens Northern
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Citizens Northern 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 NYSE Composite and Citizens Northern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Citizens Northern Corp, you can compare the effects of market volatilities on NYSE Composite and Citizens Northern 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 NYSE Composite with a short position of Citizens Northern. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Citizens Northern.
Diversification Opportunities for NYSE Composite and Citizens Northern
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Citizens is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Citizens Northern Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Northern Corp and NYSE Composite 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 NYSE Composite are associated (or correlated) with Citizens Northern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Northern Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Citizens Northern go up and down completely randomly.
Pair Corralation between NYSE Composite and Citizens Northern
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.26 times more return on investment than Citizens Northern. However, NYSE Composite is 3.86 times less risky than Citizens Northern. It trades about 0.12 of its potential returns per unit of risk. Citizens Northern Corp is currently generating about 0.01 per unit of risk. If you would invest 1,685,289 in NYSE Composite on August 25, 2024 and sell it today you would earn a total of 327,056 from holding NYSE Composite or generate 19.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Citizens Northern Corp
Performance |
| Timeline |
NYSE Composite and Citizens Northern Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Citizens Northern Corp
Pair trading matchups for Citizens Northern
Pair Trading with NYSE Composite and Citizens Northern
The main advantage of trading using opposite NYSE Composite and Citizens Northern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Citizens Northern 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 Northern will offset losses from the drop in Citizens Northern's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Citizens Northern vs. Fifth Third Bancorp | Citizens Northern vs. Zions Bancorporation | Citizens Northern vs. Huntington Bancshares Incorporated | Citizens Northern vs. PNC Financial Services |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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