Correlation Between Citigroup and Republic Services
Can any of the company-specific risk be diversified away by investing in both Citigroup and Republic Services 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 Republic Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Republic Services, you can compare the effects of market volatilities on Citigroup and Republic Services 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 Republic Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Republic Services.
Diversification Opportunities for Citigroup and Republic Services
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Republic is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Republic Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Republic Services 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 Republic Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Republic Services has no effect on the direction of Citigroup i.e., Citigroup and Republic Services go up and down completely randomly.
Pair Corralation between Citigroup and Republic Services
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Republic Services. In addition to that, Citigroup is 2.05 times more volatile than Republic Services. It trades about -0.04 of its total potential returns per unit of risk. Republic Services is currently generating about 0.47 per unit of volatility. If you would invest 21,464 in Republic Services on November 28, 2024 and sell it today you would earn a total of 1,822 from holding Republic Services or generate 8.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Republic Services
Performance |
| Timeline |
| Citigroup |
| Republic Services |
Citigroup and Republic Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Republic Services
The main advantage of trading using opposite Citigroup and Republic Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Republic Services 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 Republic Services will offset losses from the drop in Republic Services' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Republic Services vs. Liontrust Asset Management | Republic Services vs. Primary Health Properties | Republic Services vs. Zurich Insurance Group | Republic Services vs. Eco Animal Health |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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