Correlation Between Citigroup and Coremax Corp
Can any of the company-specific risk be diversified away by investing in both Citigroup and Coremax Corp 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 Coremax Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Coremax Corp, you can compare the effects of market volatilities on Citigroup and Coremax Corp 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 Coremax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Coremax Corp.
Diversification Opportunities for Citigroup and Coremax Corp
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Coremax is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Coremax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coremax 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 Coremax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coremax Corp has no effect on the direction of Citigroup i.e., Citigroup and Coremax Corp go up and down completely randomly.
Pair Corralation between Citigroup and Coremax Corp
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.83 times more return on investment than Coremax Corp. However, Citigroup is 1.21 times less risky than Coremax Corp. It trades about 0.13 of its potential returns per unit of risk. Coremax Corp is currently generating about -0.03 per unit of risk. If you would invest 4,053 in Citigroup on September 1, 2024 and sell it today you would earn a total of 3,034 from holding Citigroup or generate 74.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.88% |
| Values | Daily Returns |
Citigroup vs. Coremax Corp
Performance |
| Timeline |
| Citigroup |
| Coremax Corp |
Citigroup and Coremax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Coremax Corp
The main advantage of trading using opposite Citigroup and Coremax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Coremax Corp 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 Coremax Corp will offset losses from the drop in Coremax Corp's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Coremax Corp vs. Mechema Chemicals Int | Coremax Corp vs. China Steel Chemical | Coremax Corp vs. Delta Electronics | Coremax Corp vs. Hota Industrial Mfg |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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