Correlation Between Citigroup and RF Materials
Can any of the company-specific risk be diversified away by investing in both Citigroup and RF Materials 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 RF Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and RF Materials Co, you can compare the effects of market volatilities on Citigroup and RF Materials 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 RF Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and RF Materials.
Diversification Opportunities for Citigroup and RF Materials
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and 327260 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and RF Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF Materials 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 RF Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RF Materials has no effect on the direction of Citigroup i.e., Citigroup and RF Materials go up and down completely randomly.
Pair Corralation between Citigroup and RF Materials
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.46 times more return on investment than RF Materials. However, Citigroup is 2.18 times less risky than RF Materials. It trades about 0.21 of its potential returns per unit of risk. RF Materials Co is currently generating about -0.2 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% 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. RF Materials Co
Performance |
| Timeline |
| Citigroup |
| RF Materials |
Citigroup and RF Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and RF Materials
The main advantage of trading using opposite Citigroup and RF Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, RF Materials 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 RF Materials will offset losses from the drop in RF Materials' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| RF Materials vs. SK Hynix | RF Materials vs. LX Semicon Co | RF Materials vs. Tokai Carbon Korea | RF Materials vs. People 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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