Correlation Between Citigroup and Uniform Industrial
Can any of the company-specific risk be diversified away by investing in both Citigroup and Uniform Industrial 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 Uniform Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Uniform Industrial Corp, you can compare the effects of market volatilities on Citigroup and Uniform Industrial 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 Uniform Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Uniform Industrial.
Diversification Opportunities for Citigroup and Uniform Industrial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Uniform is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Uniform Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniform Industrial Corp 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 Uniform Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniform Industrial Corp has no effect on the direction of Citigroup i.e., Citigroup and Uniform Industrial go up and down completely randomly.
Pair Corralation between Citigroup and Uniform Industrial
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.13 times more return on investment than Uniform Industrial. However, Citigroup is 1.13 times more volatile than Uniform Industrial Corp. It trades about 0.2 of its potential returns per unit of risk. Uniform Industrial Corp is currently generating about -0.27 per unit of risk. If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Uniform Industrial Corp
Performance |
| Timeline |
| Citigroup |
| Uniform Industrial Corp |
Citigroup and Uniform Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Uniform Industrial
The main advantage of trading using opposite Citigroup and Uniform Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Uniform Industrial 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 Uniform Industrial will offset losses from the drop in Uniform Industrial's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Uniform Industrial vs. Zinwell | Uniform Industrial vs. Senao International Co | Uniform Industrial vs. AVerMedia Technologies | Uniform Industrial vs. Gigastorage 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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