Correlation Between Citigroup and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both Citigroup and Schweiter Technologies 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 Schweiter Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Schweiter Technologies AG, you can compare the effects of market volatilities on Citigroup and Schweiter Technologies 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 Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Schweiter Technologies.
Diversification Opportunities for Citigroup and Schweiter Technologies
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Schweiter is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies 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 Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Citigroup i.e., Citigroup and Schweiter Technologies go up and down completely randomly.
Pair Corralation between Citigroup and Schweiter Technologies
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.82 times more return on investment than Schweiter Technologies. However, Citigroup is 1.21 times less risky than Schweiter Technologies. It trades about 0.08 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about -0.06 per unit of risk. If you would invest 4,558 in Citigroup on September 2, 2024 and sell it today you would earn a total of 2,529 from holding Citigroup or generate 55.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Citigroup vs. Schweiter Technologies AG
Performance |
| Timeline |
| Citigroup |
| Schweiter Technologies |
Citigroup and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Schweiter Technologies
The main advantage of trading using opposite Citigroup and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Schweiter Technologies 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Schweiter Technologies vs. Charter Communications Cl | Schweiter Technologies vs. Naturhouse Health SA | Schweiter Technologies vs. Aeorema Communications Plc | Schweiter Technologies vs. Abingdon Health 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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