Correlation Between Citizens Financial and DBS Group

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

By analyzing existing cross correlation between Citizens Financial Corp and DBS Group Holdings, you can compare the effects of market volatilities on Citizens Financial and DBS Group 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 DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and DBS Group.

Diversification Opportunities for Citizens Financial and DBS Group

0.7

Correlation Coefficient

Citizens Financial  DBS Group

Poor diversification

The 3 months correlation between Citizens and DBS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Corp and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings 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 Corp are associated (or correlated) with DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of Citizens Financial i.e., Citizens Financial and DBS Group go up and down completely randomly.

Pair Corralation between Citizens Financial and DBS Group

Given the investment horizon of 90 days Citizens Financial Corp is expected to generate 1.79 times more return on investment than DBS Group. However, Citizens Financial is 1.79 times more volatile than DBS Group Holdings. It trades about 0.13 of its potential returns per unit of risk. DBS Group Holdings is currently generating about 0.1 per unit of risk. If you would invest  2,006  in Citizens Financial Corp on September 25, 2024 and sell it today you would earn a total of  419.00  from holding Citizens Financial Corp or generate 20.89% return on investment over 90 days.

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

Citizens Financial Corp  vs.  DBS Group Holdings

Citizens Financial Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Citizens Financial showed solid returns over the last few months and may actually be approaching a breakup point.

DBS Group Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DBS Group Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, DBS Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Citizens Financial and DBS Group

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

The idea behind Citizens Financial Corp and DBS Group Holdings 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.