Correlation Between Citizens Financial and CVC Brasil

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

Diversification Opportunities for Citizens Financial and CVC Brasil

0.4

Correlation Coefficient

Citizens Financial  CVC Brasil

Very weak diversification

The 3 months correlation between Citizens and CVC is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, and CVC Brasil Operadora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVC Brasil Operadora 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 CVC Brasil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVC Brasil Operadora has no effect on the direction of Citizens Financial i.e., Citizens Financial and CVC Brasil go up and down completely randomly.

Pair Corralation between Citizens Financial and CVC Brasil

Assuming the 90 days trading horizon Citizens Financial Group, is expected to generate 0.64 times more return on investment than CVC Brasil. However, Citizens Financial Group, is 1.56 times less risky than CVC Brasil. It trades about 0.21 of its potential returns per unit of risk. CVC Brasil Operadora is currently generating about 0.05 per unit of risk. If you would invest  20,412  in Citizens Financial Group, on April 22, 2025 and sell it today you would earn a total of  7,056  from holding Citizens Financial Group, or generate 34.57% return on investment over 90 days.

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

Citizens Financial Group,  vs.  CVC Brasil Operadora

Citizens Financial Group,

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Group, are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Citizens Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

CVC Brasil Operadora

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CVC Brasil Operadora are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CVC Brasil may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Citizens Financial and CVC Brasil

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

The idea behind Citizens Financial Group, and CVC Brasil Operadora 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..