Correlation Between Citigroup and Steadfast Group
Can any of the company-specific risk be diversified away by investing in both Citigroup and Steadfast Group 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 Steadfast Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Steadfast Group Limited, you can compare the effects of market volatilities on Citigroup and Steadfast Group 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 Steadfast Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Steadfast Group.
Diversification Opportunities for Citigroup and Steadfast Group
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Steadfast is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Steadfast Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steadfast Group 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 Steadfast Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steadfast Group has no effect on the direction of Citigroup i.e., Citigroup and Steadfast Group go up and down completely randomly.
Pair Corralation between Citigroup and Steadfast Group
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.96 times more return on investment than Steadfast Group. However, Citigroup is 1.04 times less risky than Steadfast Group. It trades about 0.11 of its potential returns per unit of risk. Steadfast Group Limited is currently generating about 0.03 per unit of risk. If you would invest 6,543 in Citigroup on October 12, 2024 and sell it today you would earn a total of 783.00 from holding Citigroup or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.16% |
| Values | Daily Returns |
Citigroup vs. Steadfast Group Limited
Performance |
| Timeline |
| Citigroup |
| Steadfast Group |
Citigroup and Steadfast Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Steadfast Group
The main advantage of trading using opposite Citigroup and Steadfast Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Steadfast Group 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 Steadfast Group will offset losses from the drop in Steadfast Group's long position.| Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co | Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank |
| Steadfast Group vs. Brown Brown | Steadfast Group vs. Sabre Insurance Group | Steadfast Group vs. Superior Plus Corp | Steadfast Group vs. NMI Holdings |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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