Correlation Between Citigroup and Retail Estates
Can any of the company-specific risk be diversified away by investing in both Citigroup and Retail Estates 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 Retail Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Retail Estates NV, you can compare the effects of market volatilities on Citigroup and Retail Estates 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 Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Retail Estates.
Diversification Opportunities for Citigroup and Retail Estates
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Retail is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV 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 Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of Citigroup i.e., Citigroup and Retail Estates go up and down completely randomly.
Pair Corralation between Citigroup and Retail Estates
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.88 times less return on investment than Retail Estates. But when comparing it to its historical volatility, Citigroup is 3.14 times less risky than Retail Estates. It trades about 0.09 of its potential returns per unit of risk. Retail Estates NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,584 in Retail Estates NV on September 1, 2024 and sell it today you would earn a total of 1,626 from holding Retail Estates NV or generate 29.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Citigroup vs. Retail Estates NV
Performance |
| Timeline |
| Citigroup |
| Retail Estates NV |
Citigroup and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Retail Estates
The main advantage of trading using opposite Citigroup and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Retail Estates vs. Uniper SE | Retail Estates vs. Mulberry Group PLC | Retail Estates vs. London Security Plc | Retail Estates vs. Triad Group PLC |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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