Correlation Between Citizens Financial and Coastal Financial
Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Coastal 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 Citizens Financial and Coastal Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Financial Group and Coastal Financial Corp, you can compare the effects of market volatilities on Citizens Financial and Coastal 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 Citizens Financial with a short position of Coastal Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Coastal Financial.
Diversification Opportunities for Citizens Financial and Coastal Financial
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citizens and Coastal is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Coastal Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Financial Corp and Citizens 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 Citizens Financial Group are associated (or correlated) with Coastal Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Financial Corp has no effect on the direction of Citizens Financial i.e., Citizens Financial and Coastal Financial go up and down completely randomly.
Pair Corralation between Citizens Financial and Coastal Financial
Assuming the 90 days trading horizon Citizens Financial Group is expected to generate 0.63 times more return on investment than Coastal Financial. However, Citizens Financial Group is 1.58 times less risky than Coastal Financial. It trades about 0.03 of its potential returns per unit of risk. Coastal Financial Corp is currently generating about 0.02 per unit of risk. If you would invest 2,196 in Citizens Financial Group on January 30, 2024 and sell it today you would earn a total of 310.00 from holding Citizens Financial Group or generate 14.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.74% |
Values | Daily Returns |
Citizens Financial Group vs. Coastal Financial Corp
Performance |
Timeline |
Citizens Financial |
Coastal Financial Corp |
Citizens Financial and Coastal Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citizens Financial and Coastal Financial
The main advantage of trading using opposite Citizens Financial and Coastal Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial position performs unexpectedly, Coastal 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 Coastal Financial will offset losses from the drop in Coastal Financial's long position.Citizens Financial vs. KeyCorp | Citizens Financial vs. Regions Financial | Citizens Financial vs. US Bancorp | Citizens Financial vs. KeyCorp |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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