Correlation Between Citigroup and Cleanaway
Can any of the company-specific risk be diversified away by investing in both Citigroup and Cleanaway 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 Cleanaway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Cleanaway Co, you can compare the effects of market volatilities on Citigroup and Cleanaway 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 Cleanaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Cleanaway.
Diversification Opportunities for Citigroup and Cleanaway
Excellent diversification
The 3 months correlation between Citigroup and Cleanaway is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cleanaway Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleanaway 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 Cleanaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleanaway has no effect on the direction of Citigroup i.e., Citigroup and Cleanaway go up and down completely randomly.
Pair Corralation between Citigroup and Cleanaway
Taking into account the 90-day investment horizon Citigroup is expected to generate 7.18 times more return on investment than Cleanaway. However, Citigroup is 7.18 times more volatile than Cleanaway Co. It trades about 0.24 of its potential returns per unit of risk. Cleanaway Co is currently generating about -0.19 per unit of risk. If you would invest 6,245 in Citigroup on August 25, 2024 and sell it today you would earn a total of 739.00 from holding Citigroup or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Cleanaway Co
Performance |
| Timeline |
| Citigroup |
| Cleanaway |
Citigroup and Cleanaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Cleanaway
The main advantage of trading using opposite Citigroup and Cleanaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Cleanaway 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 Cleanaway will offset losses from the drop in Cleanaway's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Cleanaway vs. Sunny Friend Environmental | Cleanaway vs. Taiwan Secom Co | Cleanaway vs. TTET Union Corp | Cleanaway vs. ECOVE Environment Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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