Correlation Between Territorial Bancorp and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Territorial Bancorp 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 Territorial Bancorp and Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Territorial Bancorp and Citizens Financial Corp, you can compare the effects of market volatilities on Territorial Bancorp 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 Territorial Bancorp with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Territorial Bancorp and Citizens Financial.
Diversification Opportunities for Territorial Bancorp and Citizens Financial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Territorial and Citizens is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Territorial Bancorp 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 Territorial Bancorp 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 Territorial Bancorp 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 Territorial Bancorp i.e., Territorial Bancorp and Citizens Financial go up and down completely randomly.
Pair Corralation between Territorial Bancorp and Citizens Financial
Given the investment horizon of 90 days Territorial Bancorp is expected to generate 1.45 times more return on investment than Citizens Financial. However, Territorial Bancorp is 1.45 times more volatile than Citizens Financial Corp. It trades about 0.14 of its potential returns per unit of risk. Citizens Financial Corp is currently generating about 0.17 per unit of risk. If you would invest 1,008 in Territorial Bancorp on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Territorial Bancorp or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Territorial Bancorp vs. Citizens Financial Corp
Performance |
| Timeline |
| Territorial Bancorp |
| Citizens Financial Corp |
Territorial Bancorp and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Territorial Bancorp and Citizens Financial
The main advantage of trading using opposite Territorial Bancorp and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Territorial Bancorp 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.| Territorial Bancorp vs. International Bancshares | Territorial Bancorp vs. Finward Bancorp | Territorial Bancorp vs. Aquagold International | Territorial Bancorp vs. Thrivent High Yield |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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