Correlation Between Citigroup and Space Shuttle
Can any of the company-specific risk be diversified away by investing in both Citigroup and Space Shuttle 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 Space Shuttle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Space Shuttle Hi Tech, you can compare the effects of market volatilities on Citigroup and Space Shuttle 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 Space Shuttle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Space Shuttle.
Diversification Opportunities for Citigroup and Space Shuttle
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Space is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Space Shuttle Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Space Shuttle Hi 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 Space Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Space Shuttle Hi has no effect on the direction of Citigroup i.e., Citigroup and Space Shuttle go up and down completely randomly.
Pair Corralation between Citigroup and Space Shuttle
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.39 times more return on investment than Space Shuttle. However, Citigroup is 1.39 times more volatile than Space Shuttle Hi Tech. It trades about 0.27 of its potential returns per unit of risk. Space Shuttle Hi Tech is currently generating about -0.31 per unit of risk. If you would invest 6,315 in Citigroup on September 2, 2024 and sell it today you would earn a total of 772.00 from holding Citigroup or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Space Shuttle Hi Tech
Performance |
| Timeline |
| Citigroup |
| Space Shuttle Hi |
Citigroup and Space Shuttle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Space Shuttle
The main advantage of trading using opposite Citigroup and Space Shuttle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Space Shuttle 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 Space Shuttle will offset losses from the drop in Space Shuttle's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Space Shuttle vs. Universal Microelectronics Co | Space Shuttle vs. Greatek Electronics | Space Shuttle vs. Phihong Technology Co | Space Shuttle vs. Zippy Technology Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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