Correlation Between Citigroup and Invion
Can any of the company-specific risk be diversified away by investing in both Citigroup and Invion 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 Invion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Invion Limited, you can compare the effects of market volatilities on Citigroup and Invion 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 Invion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Invion.
Diversification Opportunities for Citigroup and Invion
Modest diversification
The 3 months correlation between Citigroup and Invion is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Invion Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invion Limited 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 Invion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invion Limited has no effect on the direction of Citigroup i.e., Citigroup and Invion go up and down completely randomly.
Pair Corralation between Citigroup and Invion
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.2 times more return on investment than Invion. However, Citigroup is 5.04 times less risky than Invion. It trades about 0.45 of its potential returns per unit of risk. Invion Limited is currently generating about -0.13 per unit of risk. If you would invest 6,977 in Citigroup on October 23, 2024 and sell it today you would earn a total of 1,190 from holding Citigroup or generate 17.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 84.21% |
| Values | Daily Returns |
Citigroup vs. Invion Limited
Performance |
| Timeline |
| Citigroup |
| Invion Limited |
Citigroup and Invion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Invion
The main advantage of trading using opposite Citigroup and Invion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Invion 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 Invion will offset losses from the drop in Invion's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Invion vs. INTERCONT HOTELS | Invion vs. Park Hotels Resorts | Invion vs. Corsair Gaming | Invion vs. HYATT HOTELS A |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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