Correlation Between Citigroup and Genesis Technology
Can any of the company-specific risk be diversified away by investing in both Citigroup and Genesis Technology 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 Genesis Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Genesis Technology, you can compare the effects of market volatilities on Citigroup and Genesis Technology 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 Genesis Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Genesis Technology.
Diversification Opportunities for Citigroup and Genesis Technology
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Genesis is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Genesis Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Technology 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 Genesis Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Technology has no effect on the direction of Citigroup i.e., Citigroup and Genesis Technology go up and down completely randomly.
Pair Corralation between Citigroup and Genesis Technology
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.87 times more return on investment than Genesis Technology. However, Citigroup is 1.15 times less risky than Genesis Technology. It trades about 0.06 of its potential returns per unit of risk. Genesis Technology is currently generating about 0.03 per unit of risk. If you would invest 4,733 in Citigroup on August 27, 2024 and sell it today you would earn a total of 2,251 from holding Citigroup or generate 47.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.8% |
| Values | Daily Returns |
Citigroup vs. Genesis Technology
Performance |
| Timeline |
| Citigroup |
| Genesis Technology |
Citigroup and Genesis Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Genesis Technology
The main advantage of trading using opposite Citigroup and Genesis Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Genesis Technology 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 Genesis Technology will offset losses from the drop in Genesis Technology's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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