Correlation Between Citigroup and RaemongRaein
Can any of the company-specific risk be diversified away by investing in both Citigroup and RaemongRaein 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 RaemongRaein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and RaemongRaein Co, you can compare the effects of market volatilities on Citigroup and RaemongRaein 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 RaemongRaein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and RaemongRaein.
Diversification Opportunities for Citigroup and RaemongRaein
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and RaemongRaein is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and RaemongRaein Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RaemongRaein 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 RaemongRaein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RaemongRaein has no effect on the direction of Citigroup i.e., Citigroup and RaemongRaein go up and down completely randomly.
Pair Corralation between Citigroup and RaemongRaein
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.42 times more return on investment than RaemongRaein. However, Citigroup is 2.4 times less risky than RaemongRaein. It trades about 0.32 of its potential returns per unit of risk. RaemongRaein Co is currently generating about -0.05 per unit of risk. If you would invest 6,235 in Citigroup on September 5, 2024 and sell it today you would earn a total of 915.00 from holding Citigroup or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. RaemongRaein Co
Performance |
| Timeline |
| Citigroup |
| RaemongRaein |
Citigroup and RaemongRaein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and RaemongRaein
The main advantage of trading using opposite Citigroup and RaemongRaein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, RaemongRaein 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 RaemongRaein will offset losses from the drop in RaemongRaein's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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