Correlation Between Citigroup and Thor Industries
Can any of the company-specific risk be diversified away by investing in both Citigroup and Thor Industries 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 Thor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Thor Industries, you can compare the effects of market volatilities on Citigroup and Thor Industries 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 Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Thor Industries.
Diversification Opportunities for Citigroup and Thor Industries
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Thor is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries 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 Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of Citigroup i.e., Citigroup and Thor Industries go up and down completely randomly.
Pair Corralation between Citigroup and Thor Industries
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.62 times more return on investment than Thor Industries. However, Citigroup is 1.62 times less risky than Thor Industries. It trades about 0.07 of its potential returns per unit of risk. Thor Industries is currently generating about 0.04 per unit of risk. If you would invest 4,168 in Citigroup on September 20, 2024 and sell it today you would earn a total of 2,944 from holding Citigroup or generate 70.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.43% |
| Values | Daily Returns |
Citigroup vs. Thor Industries
Performance |
| Timeline |
| Citigroup |
| Thor Industries |
Citigroup and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Thor Industries
The main advantage of trading using opposite Citigroup and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Thor Industries 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 Thor Industries will offset losses from the drop in Thor Industries' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Thor Industries vs. Dalata Hotel Group | Thor Industries vs. bet at home AG | Thor Industries vs. Melia Hotels | Thor Industries vs. Capital Drilling |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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