Correlation Between Citigroup and Creative Sensor
Can any of the company-specific risk be diversified away by investing in both Citigroup and Creative Sensor 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 Creative Sensor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Creative Sensor, you can compare the effects of market volatilities on Citigroup and Creative Sensor 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 Creative Sensor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Creative Sensor.
Diversification Opportunities for Citigroup and Creative Sensor
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Creative is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Creative Sensor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creative Sensor 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 Creative Sensor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creative Sensor has no effect on the direction of Citigroup i.e., Citigroup and Creative Sensor go up and down completely randomly.
Pair Corralation between Citigroup and Creative Sensor
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.27 times more return on investment than Creative Sensor. However, Citigroup is 3.68 times less risky than Creative Sensor. It trades about 0.19 of its potential returns per unit of risk. Creative Sensor is currently generating about -0.33 per unit of risk. If you would invest 6,889 in Citigroup on September 14, 2024 and sell it today you would earn a total of 231.00 from holding Citigroup or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Creative Sensor
Performance |
| Timeline |
| Citigroup |
| Creative Sensor |
Citigroup and Creative Sensor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Creative Sensor
The main advantage of trading using opposite Citigroup and Creative Sensor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Creative Sensor 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 Creative Sensor will offset losses from the drop in Creative Sensor's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Creative Sensor vs. AU Optronics | Creative Sensor vs. Innolux Corp | Creative Sensor vs. Ruentex Development Co | Creative Sensor vs. WiseChip Semiconductor |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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