Correlation Between Citigroup and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both Citigroup and MEDICAL FACILITIES 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 MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on Citigroup and MEDICAL FACILITIES 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 MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and MEDICAL FACILITIES.
Diversification Opportunities for Citigroup and MEDICAL FACILITIES
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and MEDICAL is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW 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 MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of Citigroup i.e., Citigroup and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between Citigroup and MEDICAL FACILITIES
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.24 times less return on investment than MEDICAL FACILITIES. But when comparing it to its historical volatility, Citigroup is 1.22 times less risky than MEDICAL FACILITIES. It trades about 0.21 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 960.00 in MEDICAL FACILITIES NEW on August 29, 2024 and sell it today you would earn a total of 110.00 from holding MEDICAL FACILITIES NEW or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| Citigroup |
| MEDICAL FACILITIES NEW |
Citigroup and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and MEDICAL FACILITIES
The main advantage of trading using opposite Citigroup and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| MEDICAL FACILITIES vs. AM EAGLE OUTFITTERS | MEDICAL FACILITIES vs. Genco Shipping Trading | MEDICAL FACILITIES vs. Liberty Broadband | MEDICAL FACILITIES vs. Gaztransport Technigaz SA |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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