Correlation Between Citigroup and NICE Information
Can any of the company-specific risk be diversified away by investing in both Citigroup and NICE Information 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 NICE Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and NICE Information Service, you can compare the effects of market volatilities on Citigroup and NICE Information 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 NICE Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NICE Information.
Diversification Opportunities for Citigroup and NICE Information
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and NICE is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NICE Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NICE Information Service 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 NICE Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NICE Information Service has no effect on the direction of Citigroup i.e., Citigroup and NICE Information go up and down completely randomly.
Pair Corralation between Citigroup and NICE Information
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.99 times more return on investment than NICE Information. However, Citigroup is 1.01 times less risky than NICE Information. It trades about 0.07 of its potential returns per unit of risk. NICE Information Service is currently generating about 0.05 per unit of risk. If you would invest 6,079 in Citigroup on August 31, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.06% |
| Values | Daily Returns |
Citigroup vs. NICE Information Service
Performance |
| Timeline |
| Citigroup |
| NICE Information Service |
Citigroup and NICE Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and NICE Information
The main advantage of trading using opposite Citigroup and NICE Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, NICE Information 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 NICE Information will offset losses from the drop in NICE Information's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| NICE Information vs. Korea New Network | NICE Information vs. ICD Co | NICE Information vs. DYPNF CoLtd | NICE Information vs. Busan Industrial Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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