Correlation Between Tectonic Financial and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Tectonic Financial 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 Tectonic Financial and Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tectonic Financial PR and Citizens Financial Services, you can compare the effects of market volatilities on Tectonic Financial 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 Tectonic Financial with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tectonic Financial and Citizens Financial.
Diversification Opportunities for Tectonic Financial and Citizens Financial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tectonic and Citizens is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR and Citizens Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial and Tectonic Financial 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 Tectonic Financial PR 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 Tectonic Financial i.e., Tectonic Financial and Citizens Financial go up and down completely randomly.
Pair Corralation between Tectonic Financial and Citizens Financial
Assuming the 90 days horizon Tectonic Financial is expected to generate 17.47 times less return on investment than Citizens Financial. But when comparing it to its historical volatility, Tectonic Financial PR is 3.76 times less risky than Citizens Financial. It trades about 0.05 of its potential returns per unit of risk. Citizens Financial Services is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 5,829 in Citizens Financial Services on September 1, 2024 and sell it today you would earn a total of 1,232 from holding Citizens Financial Services or generate 21.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tectonic Financial PR vs. Citizens Financial Services
Performance |
| Timeline |
| Tectonic Financial |
| Citizens Financial |
Tectonic Financial and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tectonic Financial and Citizens Financial
The main advantage of trading using opposite Tectonic Financial and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic Financial 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.| Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants | Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Bridgewater Bancshares Depositary |
| Citizens Financial vs. Home Federal Bancorp | Citizens Financial vs. Community West Bancshares | Citizens Financial vs. Magyar Bancorp | Citizens Financial vs. Finward 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |