Correlation Between Citigroup and RPBio
Can any of the company-specific risk be diversified away by investing in both Citigroup and RPBio 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 RPBio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and RPBio Inc, you can compare the effects of market volatilities on Citigroup and RPBio 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 RPBio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and RPBio.
Diversification Opportunities for Citigroup and RPBio
Excellent diversification
The 3 months correlation between Citigroup and RPBio is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and RPBio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPBio Inc 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 RPBio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPBio Inc has no effect on the direction of Citigroup i.e., Citigroup and RPBio go up and down completely randomly.
Pair Corralation between Citigroup and RPBio
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.62 times more return on investment than RPBio. However, Citigroup is 1.61 times less risky than RPBio. It trades about 0.08 of its potential returns per unit of risk. RPBio Inc is currently generating about -0.07 per unit of risk. If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.06% |
| Values | Daily Returns |
Citigroup vs. RPBio Inc
Performance |
| Timeline |
| Citigroup |
| RPBio Inc |
Citigroup and RPBio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and RPBio
The main advantage of trading using opposite Citigroup and RPBio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, RPBio 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 RPBio will offset losses from the drop in RPBio's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| RPBio vs. Jeju Semiconductor Corp | RPBio vs. TS Investment Corp | RPBio vs. ABOV Semiconductor Co | RPBio vs. Hanmi Semiconductor 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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