Correlation Between Citigroup and Broadex Technologies
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By analyzing existing cross correlation between Citigroup and Broadex Technologies Co, you can compare the effects of market volatilities on Citigroup and Broadex Technologies 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 Broadex Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Broadex Technologies.
Diversification Opportunities for Citigroup and Broadex Technologies
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Broadex is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Broadex Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadex Technologies 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 Broadex Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadex Technologies has no effect on the direction of Citigroup i.e., Citigroup and Broadex Technologies go up and down completely randomly.
Pair Corralation between Citigroup and Broadex Technologies
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.15 times less return on investment than Broadex Technologies. But when comparing it to its historical volatility, Citigroup is 2.68 times less risky than Broadex Technologies. It trades about 0.07 of its potential returns per unit of risk. Broadex Technologies Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,820 in Broadex Technologies Co on August 29, 2024 and sell it today you would earn a total of 413.00 from holding Broadex Technologies Co or generate 22.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.16% |
| Values | Daily Returns |
Citigroup vs. Broadex Technologies Co
Performance |
| Timeline |
| Citigroup |
| Broadex Technologies |
Citigroup and Broadex Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Broadex Technologies
The main advantage of trading using opposite Citigroup and Broadex Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Broadex Technologies 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 Broadex Technologies will offset losses from the drop in Broadex Technologies' long position.The idea behind Citigroup and Broadex Technologies Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Broadex Technologies vs. Kweichow Moutai Co | Broadex Technologies vs. Shenzhen Mindray Bio Medical | Broadex Technologies vs. Jiangsu Pacific Quartz | Broadex Technologies vs. G bits Network Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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