Correlation Between CVC Brasil and Citizens Financial

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

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

Diversification Opportunities for CVC Brasil and Citizens Financial

0.43

Correlation Coefficient

CVC Brasil  Citizens Financial

Very weak diversification

The 3 months correlation between CVC and Citizens is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CVC Brasil Operadora and Citizens Financial Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Group, and CVC Brasil 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 CVC Brasil Operadora 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 Group, has no effect on the direction of CVC Brasil i.e., CVC Brasil and Citizens Financial go up and down completely randomly.

Pair Corralation between CVC Brasil and Citizens Financial

Assuming the 90 days trading horizon CVC Brasil is expected to generate 2.55 times less return on investment than Citizens Financial. In addition to that, CVC Brasil is 1.56 times more volatile than Citizens Financial Group,. It trades about 0.05 of its total potential returns per unit of risk. Citizens Financial Group, is currently generating about 0.21 per unit of volatility. 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

CVC Brasil Operadora  vs.  Citizens Financial Group,

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.

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.

Pair Trading with CVC Brasil and Citizens Financial

The main advantage of trading using opposite CVC Brasil and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVC Brasil 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 CVC Brasil Operadora and Citizens Financial Group, 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.