Correlation Between Citigroup and EURODRY
Can any of the company-specific risk be diversified away by investing in both Citigroup and EURODRY 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 EURODRY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and EURODRY LTD DL, you can compare the effects of market volatilities on Citigroup and EURODRY 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 EURODRY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and EURODRY.
Diversification Opportunities for Citigroup and EURODRY
Very good diversification
The 3 months correlation between Citigroup and EURODRY is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and EURODRY LTD DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EURODRY LTD DL 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 EURODRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EURODRY LTD DL has no effect on the direction of Citigroup i.e., Citigroup and EURODRY go up and down completely randomly.
Pair Corralation between Citigroup and EURODRY
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.78 times more return on investment than EURODRY. However, Citigroup is 1.28 times less risky than EURODRY. It trades about 0.08 of its potential returns per unit of risk. EURODRY LTD DL is currently generating about -0.04 per unit of risk. If you would invest 4,492 in Citigroup on November 28, 2024 and sell it today you would earn a total of 3,322 from holding Citigroup or generate 73.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Citigroup vs. EURODRY LTD DL
Performance |
| Timeline |
| Citigroup |
| EURODRY LTD DL |
Citigroup and EURODRY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and EURODRY
The main advantage of trading using opposite Citigroup and EURODRY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, EURODRY 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 EURODRY will offset losses from the drop in EURODRY's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| EURODRY vs. BROADPEAK SA EO | EURODRY vs. Luckin Coffee | EURODRY vs. Transport International Holdings | EURODRY vs. EVS Broadcast Equipment |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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