Correlation Between Citizens Financial and Triad Business

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

Diversification Opportunities for Citizens Financial and Triad Business

-0.78

Correlation Coefficient

Citizens Financial  Triad Business

Pay attention - limited upside

The 3 months correlation between Citizens and Triad is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Corp and Triad Business Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triad Business Bank 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 Triad Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triad Business Bank has no effect on the direction of Citizens Financial i.e., Citizens Financial and Triad Business go up and down completely randomly.

Pair Corralation between Citizens Financial and Triad Business

Given the investment horizon of 90 days Citizens Financial Corp is expected to generate 1.64 times more return on investment than Triad Business. However, Citizens Financial is 1.64 times more volatile than Triad Business Bank. It trades about 0.13 of its potential returns per unit of risk. Triad Business Bank is currently generating about -0.03 per unit of risk. If you would invest  2,005  in Citizens Financial Corp on September 13, 2024 and sell it today you would earn a total of  420.00  from holding Citizens Financial Corp or generate 20.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Citizens Financial Corp  vs.  Triad Business Bank

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 fragile basic indicators, Citizens Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Triad Business Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Triad Business Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Triad Business is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citizens Financial and Triad Business

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

The idea behind Citizens Financial Corp and Triad Business Bank 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 Transaction History module to view history of all your transactions and understand their impact on performance.