Correlation Between Citigroup and Continental Holdings
Can any of the company-specific risk be diversified away by investing in both Citigroup and Continental Holdings 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 Continental Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Continental Holdings Corp, you can compare the effects of market volatilities on Citigroup and Continental Holdings 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 Continental Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Continental Holdings.
Diversification Opportunities for Citigroup and Continental Holdings
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Continental is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Continental Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Holdings Corp 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 Continental Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Holdings Corp has no effect on the direction of Citigroup i.e., Citigroup and Continental Holdings go up and down completely randomly.
Pair Corralation between Citigroup and Continental Holdings
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.84 times more return on investment than Continental Holdings. However, Citigroup is 1.2 times less risky than Continental Holdings. It trades about 0.27 of its potential returns per unit of risk. Continental Holdings Corp is currently generating about 0.09 per unit of risk. If you would invest 6,315 in Citigroup on September 2, 2024 and sell it today you would earn a total of 772.00 from holding Citigroup or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Continental Holdings Corp
Performance |
| Timeline |
| Citigroup |
| Continental Holdings Corp |
Citigroup and Continental Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Continental Holdings
The main advantage of trading using opposite Citigroup and Continental Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Continental Holdings 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 Continental Holdings will offset losses from the drop in Continental Holdings' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Continental Holdings vs. BES Engineering Co | Continental Holdings vs. Chien Kuo Construction | Continental Holdings vs. Hung Sheng Construction | Continental Holdings vs. YungShin Global Holding |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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