Correlation Between United Overseas and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both United Overseas 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 United Overseas and Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Overseas Bank and Citizens Financial Corp, you can compare the effects of market volatilities on United Overseas 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 United Overseas with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Overseas and Citizens Financial.
Diversification Opportunities for United Overseas and Citizens Financial
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Citizens is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding United Overseas Bank 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 United Overseas 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 United Overseas Bank 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 United Overseas i.e., United Overseas and Citizens Financial go up and down completely randomly.
Pair Corralation between United Overseas and Citizens Financial
Assuming the 90 days horizon United Overseas is expected to generate 1.57 times less return on investment than Citizens Financial. In addition to that, United Overseas is 1.0 times more volatile than Citizens Financial Corp. It trades about 0.24 of its total potential returns per unit of risk. Citizens Financial Corp is currently generating about 0.38 per unit of volatility. If you would invest 2,250 in Citizens Financial Corp on August 29, 2024 and sell it today you would earn a total of 350.00 from holding Citizens Financial Corp or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Overseas Bank vs. Citizens Financial Corp
Performance |
| Timeline |
| United Overseas Bank |
| Citizens Financial Corp |
United Overseas and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Overseas and Citizens Financial
The main advantage of trading using opposite United Overseas and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Overseas 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.| United Overseas vs. KBC Groep NV | United Overseas vs. DBS Group Holdings | United Overseas vs. HomeStreet | United Overseas vs. Bank of Hawaii |
| Citizens Financial vs. Israel Discount Bank | Citizens Financial vs. Baraboo Bancorporation | Citizens Financial vs. Danske Bank AS | Citizens Financial vs. Jyske Bank AS |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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