Correlation Between Guardian Capital and Citizens Financial

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

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

Diversification Opportunities for Guardian Capital and Citizens Financial

-0.35

Correlation Coefficient

Guardian Capital  Citizens Financial

Very good diversification

The 3 months correlation between Guardian and Citizens is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Capital Group and Citizens Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Corp and Guardian Capital 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 Guardian Capital Group are associated (or correlated) with Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Corp has no effect on the direction of Guardian Capital i.e., Guardian Capital and Citizens Financial go up and down completely randomly.

Pair Corralation between Guardian Capital and Citizens Financial

Assuming the 90 days horizon Guardian Capital Group is expected to under-perform the Citizens Financial. But the pink sheet apears to be less risky and, when comparing its historical volatility, Guardian Capital Group is 1.44 times less risky than Citizens Financial. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Citizens Financial Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,860  in Citizens Financial Corp on September 29, 2024 and sell it today you would earn a total of  565.00  from holding Citizens Financial Corp or generate 30.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.43%
Values	Daily Returns

Guardian Capital Group  vs.  Citizens Financial Corp

Guardian Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guardian Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal 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.

Citizens Financial Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Corp are ranked lower than 9 (%) 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.

Pair Trading with Guardian Capital and Citizens Financial

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

The idea behind Guardian Capital Group and Citizens Financial Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.