Correlation Between Citigroup and H-FARM SPA
Can any of the company-specific risk be diversified away by investing in both Citigroup and H-FARM SPA 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 H-FARM SPA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and H FARM SPA, you can compare the effects of market volatilities on Citigroup and H-FARM SPA 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 H-FARM SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and H-FARM SPA.
Diversification Opportunities for Citigroup and H-FARM SPA
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and H-FARM is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and H FARM SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H FARM SPA 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 H-FARM SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H FARM SPA has no effect on the direction of Citigroup i.e., Citigroup and H-FARM SPA go up and down completely randomly.
Pair Corralation between Citigroup and H-FARM SPA
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.32 times more return on investment than H-FARM SPA. However, Citigroup is 3.12 times less risky than H-FARM SPA. It trades about 0.08 of its potential returns per unit of risk. H FARM SPA is currently generating about 0.0 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 | 98.16% |
| Values | Daily Returns |
Citigroup vs. H FARM SPA
Performance |
| Timeline |
| Citigroup |
| H FARM SPA |
Citigroup and H-FARM SPA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and H-FARM SPA
The main advantage of trading using opposite Citigroup and H-FARM SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, H-FARM SPA 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 H-FARM SPA will offset losses from the drop in H-FARM SPA's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| H-FARM SPA vs. Ameriprise Financial | H-FARM SPA vs. Ares Management Corp | H-FARM SPA vs. Superior Plus Corp | H-FARM SPA vs. NMI Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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