Correlation Between Citizens Financial and Banc Of

Can any of the company-specific risk be diversified away by investing in both Citizens Financial and Banc Of 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 Banc Of 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 Banc of California,, you can compare the effects of market volatilities on Citizens Financial and Banc Of 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 Banc Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Banc Of.

Diversification Opportunities for Citizens Financial and Banc Of

-0.52

Correlation Coefficient

Citizens Financial  Banc Of

Excellent diversification

The 3 months correlation between Citizens and Banc is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group and Banc of California, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banc of California, 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 Banc Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banc of California, has no effect on the direction of Citizens Financial i.e., Citizens Financial and Banc Of go up and down completely randomly.

Pair Corralation between Citizens Financial and Banc Of

Assuming the 90 days trading horizon Citizens Financial is expected to generate 24.27 times less return on investment than Banc Of. But when comparing it to its historical volatility, Citizens Financial Group is 2.21 times less risky than Banc Of. It trades about 0.01 of its potential returns per unit of risk. Banc of California, is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,392  in Banc of California, on September 3, 2024 and sell it today you would earn a total of  331.00  from holding Banc of California, or generate 23.78% return on investment over 90 days.

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

Citizens Financial Group  vs.  Banc of California,

Citizens Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Citizens Financial is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Banc of California,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Banc of California, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Banc Of exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citizens Financial and Banc Of

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

The idea behind Citizens Financial Group and Banc of California, 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.