Correlation Between Citigroup and Bonny Worldwide
Can any of the company-specific risk be diversified away by investing in both Citigroup and Bonny Worldwide 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 Bonny Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Bonny Worldwide, you can compare the effects of market volatilities on Citigroup and Bonny Worldwide 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 Bonny Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Bonny Worldwide.
Diversification Opportunities for Citigroup and Bonny Worldwide
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Bonny is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bonny Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonny Worldwide 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 Bonny Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonny Worldwide has no effect on the direction of Citigroup i.e., Citigroup and Bonny Worldwide go up and down completely randomly.
Pair Corralation between Citigroup and Bonny Worldwide
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.6 times more return on investment than Bonny Worldwide. However, Citigroup is 1.66 times less risky than Bonny Worldwide. It trades about 0.22 of its potential returns per unit of risk. Bonny Worldwide is currently generating about 0.1 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 656.00 from holding Citigroup or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Bonny Worldwide
Performance |
| Timeline |
| Citigroup |
| Bonny Worldwide |
Citigroup and Bonny Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Bonny Worldwide
The main advantage of trading using opposite Citigroup and Bonny Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Bonny Worldwide 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 Bonny Worldwide will offset losses from the drop in Bonny Worldwide's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Bonny Worldwide vs. Feng Tay Enterprises | Bonny Worldwide vs. Ruentex Materials Co | Bonny Worldwide vs. Symtek Automation Asia | Bonny Worldwide vs. CTCI 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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