Correlation Between Citizens Bancorp and Rightmove Plc

Can any of the company-specific risk be diversified away by investing in both Citizens Bancorp and Rightmove Plc 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 Bancorp and Rightmove Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citizens Bancorp Investment and Rightmove plc, you can compare the effects of market volatilities on Citizens Bancorp and Rightmove Plc 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 Bancorp with a short position of Rightmove Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Bancorp and Rightmove Plc.

Diversification Opportunities for Citizens Bancorp and Rightmove Plc

0.41

Correlation Coefficient

Citizens Bancorp  Rightmove Plc

Very weak diversification

The 3 months correlation between Citizens and Rightmove is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancorp Investment and Rightmove plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rightmove plc and Citizens 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 Citizens Bancorp Investment are associated (or correlated) with Rightmove Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rightmove plc has no effect on the direction of Citizens Bancorp i.e., Citizens Bancorp and Rightmove Plc go up and down completely randomly.

Pair Corralation between Citizens Bancorp and Rightmove Plc

Given the investment horizon of 90 days Citizens Bancorp Investment is expected to generate 1.31 times more return on investment than Rightmove Plc. However, Citizens Bancorp is 1.31 times more volatile than Rightmove plc. It trades about 0.04 of its potential returns per unit of risk. Rightmove plc is currently generating about -0.09 per unit of risk. If you would invest  2,481  in Citizens Bancorp Investment on September 26, 2024 and sell it today you would earn a total of  74.00  from holding Citizens Bancorp Investment or generate 2.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Citizens Bancorp Investment  vs.  Rightmove plc

Citizens Bancorp Inv

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Bancorp Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Citizens Bancorp is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Rightmove plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rightmove plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Citizens Bancorp and Rightmove Plc

The main advantage of trading using opposite Citizens Bancorp and Rightmove Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Bancorp position performs unexpectedly, Rightmove Plc 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 Rightmove Plc will offset losses from the drop in Rightmove Plc's long position.

The idea behind Citizens Bancorp Investment and Rightmove plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.