Correlation Between Western New and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Western New 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 Western New and Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western New England and Citizens Financial Services, you can compare the effects of market volatilities on Western New 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 Western New with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western New and Citizens Financial.
Diversification Opportunities for Western New and Citizens Financial
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Citizens is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Western New England and Citizens Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial and Western New 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 Western New England 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 Western New i.e., Western New and Citizens Financial go up and down completely randomly.
Pair Corralation between Western New and Citizens Financial
Given the investment horizon of 90 days Western New England is expected to generate 0.62 times more return on investment than Citizens Financial. However, Western New England is 1.61 times less risky than Citizens Financial. It trades about 0.01 of its potential returns per unit of risk. Citizens Financial Services is currently generating about 0.0 per unit of risk. If you would invest 918.00 in Western New England on November 2, 2024 and sell it today you would earn a total of 24.00 from holding Western New England or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western New England vs. Citizens Financial Services
Performance |
| Timeline |
| Western New England |
| Citizens Financial |
Western New and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western New and Citizens Financial
The main advantage of trading using opposite Western New and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western New 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.| Western New vs. IF Bancorp | Western New vs. Shore Bancshares | Western New vs. Colony Bankcorp | Western New vs. Investar Holding Corp |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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