Correlation Between Citigroup and Icares Medicus
Can any of the company-specific risk be diversified away by investing in both Citigroup and Icares Medicus 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 Icares Medicus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Icares Medicus, you can compare the effects of market volatilities on Citigroup and Icares Medicus 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 Icares Medicus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Icares Medicus.
Diversification Opportunities for Citigroup and Icares Medicus
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Icares is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Icares Medicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icares Medicus 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 Icares Medicus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icares Medicus has no effect on the direction of Citigroup i.e., Citigroup and Icares Medicus go up and down completely randomly.
Pair Corralation between Citigroup and Icares Medicus
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Icares Medicus. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 1.07 times less risky than Icares Medicus. The stock trades about -0.08 of its potential returns per unit of risk. The Icares Medicus is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 12,500 in Icares Medicus on November 28, 2024 and sell it today you would lose (100.00) from holding Icares Medicus or give up 0.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Citigroup vs. Icares Medicus
Performance |
| Timeline |
| Citigroup |
| Icares Medicus |
Citigroup and Icares Medicus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Icares Medicus
The main advantage of trading using opposite Citigroup and Icares Medicus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Icares Medicus 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 Icares Medicus will offset losses from the drop in Icares Medicus' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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