Correlation Between Old National and CIT Group
Can any of the company-specific risk be diversified away by investing in both Old National and CIT Group 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 Old National and CIT Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old National Bancorp and CIT Group Preferred, you can compare the effects of market volatilities on Old National and CIT Group 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 Old National with a short position of CIT Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old National and CIT Group.
Diversification Opportunities for Old National and CIT Group
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and CIT is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Old National Bancorp and CIT Group Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIT Group Preferred and Old National 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 Old National Bancorp are associated (or correlated) with CIT Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIT Group Preferred has no effect on the direction of Old National i.e., Old National and CIT Group go up and down completely randomly.
Pair Corralation between Old National and CIT Group
Assuming the 90 days horizon Old National Bancorp is expected to generate 0.89 times more return on investment than CIT Group. However, Old National Bancorp is 1.12 times less risky than CIT Group. It trades about 0.15 of its potential returns per unit of risk. CIT Group Preferred is currently generating about 0.0 per unit of risk. If you would invest 2,490 in Old National Bancorp on August 28, 2024 and sell it today you would earn a total of 71.00 from holding Old National Bancorp or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old National Bancorp vs. CIT Group Preferred
Performance |
| Timeline |
| Old National Bancorp |
| CIT Group Preferred |
Old National and CIT Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old National and CIT Group
The main advantage of trading using opposite Old National and CIT Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old National position performs unexpectedly, CIT Group 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 CIT Group will offset losses from the drop in CIT Group's long position.| Old National vs. Capital One Financial | Old National vs. Capital One Financial | Old National vs. Bank of America |
| CIT Group vs. First Citizens BancShares | CIT Group vs. Texas Capital Bancshares | CIT Group vs. Dime Community Bancshares | CIT Group vs. Fifth Third 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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