Correlation Between Itau Unibanco and Citizens Bancorp
Can any of the company-specific risk be diversified away by investing in both Itau Unibanco and Citizens Bancorp 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 Itau Unibanco and Citizens Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itau Unibanco Banco and Citizens Bancorp Investment, you can compare the effects of market volatilities on Itau Unibanco and Citizens Bancorp 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 Itau Unibanco with a short position of Citizens Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itau Unibanco and Citizens Bancorp.
Diversification Opportunities for Itau Unibanco and Citizens Bancorp
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Itau and Citizens is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Itau Unibanco Banco and Citizens Bancorp Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Bancorp Inv and Itau Unibanco 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 Itau Unibanco Banco are associated (or correlated) with Citizens Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Bancorp Inv has no effect on the direction of Itau Unibanco i.e., Itau Unibanco and Citizens Bancorp go up and down completely randomly.
Pair Corralation between Itau Unibanco and Citizens Bancorp
Given the investment horizon of 90 days Itau Unibanco Banco is expected to under-perform the Citizens Bancorp. In addition to that, Itau Unibanco is 1.18 times more volatile than Citizens Bancorp Investment. It trades about -0.19 of its total potential returns per unit of risk. Citizens Bancorp Investment is currently generating about 0.04 per unit of volatility. If you would invest 2,481 in Citizens Bancorp Investment on September 23, 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 Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Itau Unibanco Banco vs. Citizens Bancorp Investment
Performance |
Timeline |
Itau Unibanco Banco |
Citizens Bancorp Inv |
Itau Unibanco and Citizens Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Itau Unibanco and Citizens Bancorp
The main advantage of trading using opposite Itau Unibanco and Citizens Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itau Unibanco position performs unexpectedly, Citizens Bancorp 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 Bancorp will offset losses from the drop in Citizens Bancorp's long position.Itau Unibanco vs. Shinhan Financial Group | Itau Unibanco vs. Banco De Chile | Itau Unibanco vs. Orix Corp Ads | Itau Unibanco vs. SK Telecom Co |
Citizens Bancorp vs. Banco Bradesco SA | Citizens Bancorp vs. Itau Unibanco Banco | Citizens Bancorp vs. Lloyds Banking Group | Citizens Bancorp vs. Deutsche Bank AG |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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