Correlation Between Citigroup and DC Media
Can any of the company-specific risk be diversified away by investing in both Citigroup and DC Media 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 DC Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and DC Media Co, you can compare the effects of market volatilities on Citigroup and DC Media 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 DC Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and DC Media.
Diversification Opportunities for Citigroup and DC Media
Weak diversification
The 3 months correlation between Citigroup and 263720 is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and DC Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC Media 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 DC Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC Media has no effect on the direction of Citigroup i.e., Citigroup and DC Media go up and down completely randomly.
Pair Corralation between Citigroup and DC Media
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.35 times more return on investment than DC Media. However, Citigroup is 2.86 times less risky than DC Media. It trades about 0.08 of its potential returns per unit of risk. DC Media Co is currently generating about 0.03 per unit of risk. If you would invest 4,544 in Citigroup on September 1, 2024 and sell it today you would earn a total of 2,543 from holding Citigroup or generate 55.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.31% |
| Values | Daily Returns |
Citigroup vs. DC Media Co
Performance |
| Timeline |
| Citigroup |
| DC Media |
Citigroup and DC Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and DC Media
The main advantage of trading using opposite Citigroup and DC Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, DC Media 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 DC Media will offset losses from the drop in DC Media's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| DC Media vs. Sungmoon Electronics Co | DC Media vs. iNtRON Biotechnology | DC Media vs. LG Electronics Pfd | DC Media vs. PJ Electronics Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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