Correlation Between Citigroup and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Citigroup and Supermarket Income 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 Citigroup and Supermarket Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Supermarket Income REIT, you can compare the effects of market volatilities on Citigroup and Supermarket Income 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 Citigroup with a short position of Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Supermarket Income.
Diversification Opportunities for Citigroup and Supermarket Income
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Supermarket is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT and Citigroup 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 Citigroup are associated (or correlated) with Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Citigroup i.e., Citigroup and Supermarket Income go up and down completely randomly.
Pair Corralation between Citigroup and Supermarket Income
Assuming the 90 days trading horizon Citigroup is expected to generate 1.05 times more return on investment than Supermarket Income. However, Citigroup is 1.05 times more volatile than Supermarket Income REIT. It trades about 0.08 of its potential returns per unit of risk. Supermarket Income REIT is currently generating about 0.01 per unit of risk. If you would invest 4,478 in Citigroup on September 12, 2024 and sell it today you would earn a total of 2,716 from holding Citigroup or generate 60.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.94% |
| Values | Daily Returns |
Citigroup vs. Supermarket Income REIT
Performance |
| Timeline |
| Citigroup |
| Supermarket Income REIT |
Citigroup and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Supermarket Income
The main advantage of trading using opposite Citigroup and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Supermarket Income 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 Supermarket Income will offset losses from the drop in Supermarket Income's long position.| Citigroup vs. Smithson Investment Trust | Citigroup vs. Blackrock World Mining | Citigroup vs. CNH Industrial NV | Citigroup vs. Aberdeen Diversified Income |
| Supermarket Income vs. Hammerson PLC | Supermarket Income vs. Neometals | Supermarket Income vs. Coor Service Management | Supermarket Income vs. Fidelity Sustainable USD |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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