Correlation Between Citizens Financial and SIMPAR SA

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

Diversification Opportunities for Citizens Financial and SIMPAR SA

-0.35

Correlation Coefficient

Citizens Financial  SIMPAR SA

Very good diversification

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

Pair Corralation between Citizens Financial and SIMPAR SA

Assuming the 90 days trading horizon Citizens Financial Group, is expected to generate 0.61 times more return on investment than SIMPAR SA. However, Citizens Financial Group, is 1.64 times less risky than SIMPAR SA. It trades about 0.21 of its potential returns per unit of risk. SIMPAR SA is currently generating about -0.07 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citizens Financial Group,  vs.  SIMPAR SA

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.

SIMPAR SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days SIMPAR SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Citizens Financial and SIMPAR SA

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

The idea behind Citizens Financial Group, and SIMPAR SA 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.