Correlation Between ScanSource and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both ScanSource 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 ScanSource and Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Citizens Financial Group, you can compare the effects of market volatilities on ScanSource 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 ScanSource with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Citizens Financial.
Diversification Opportunities for ScanSource and Citizens Financial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ScanSource and Citizens is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Citizens Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial and ScanSource 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 ScanSource 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 has no effect on the direction of ScanSource i.e., ScanSource and Citizens Financial go up and down completely randomly.
Pair Corralation between ScanSource and Citizens Financial
Assuming the 90 days horizon ScanSource is expected to generate 1.34 times less return on investment than Citizens Financial. In addition to that, ScanSource is 1.45 times more volatile than Citizens Financial Group. It trades about 0.18 of its total potential returns per unit of risk. Citizens Financial Group is currently generating about 0.36 per unit of volatility. If you would invest 3,800 in Citizens Financial Group on August 28, 2024 and sell it today you would earn a total of 754.00 from holding Citizens Financial Group or generate 19.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ScanSource vs. Citizens Financial Group
Performance |
| Timeline |
| ScanSource |
| Citizens Financial |
ScanSource and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Citizens Financial
The main advantage of trading using opposite ScanSource and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource 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.| ScanSource vs. MULTI CHEM LTD | ScanSource vs. HUT 8 P | ScanSource vs. AGRICUL BK CHINA H | ScanSource vs. United Natural Foods |
| Citizens Financial vs. ScanSource | Citizens Financial vs. Ameriprise Financial | Citizens Financial vs. PT Bank Maybank | Citizens Financial vs. CPU SOFTWAREHOUSE |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |