Correlation Between Citigroup and Accent Resources
Can any of the company-specific risk be diversified away by investing in both Citigroup and Accent Resources 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 Accent Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Accent Resources NL, you can compare the effects of market volatilities on Citigroup and Accent Resources 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 Accent Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Accent Resources.
Diversification Opportunities for Citigroup and Accent Resources
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Accent is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Accent Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accent Resources 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 Accent Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accent Resources has no effect on the direction of Citigroup i.e., Citigroup and Accent Resources go up and down completely randomly.
Pair Corralation between Citigroup and Accent Resources
Taking into account the 90-day investment horizon Citigroup is expected to generate 76.46 times less return on investment than Accent Resources. But when comparing it to its historical volatility, Citigroup is 52.59 times less risky than Accent Resources. It trades about 0.08 of its potential returns per unit of risk. Accent Resources NL is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.15 in Accent Resources NL on September 13, 2024 and sell it today you would earn a total of 1.55 from holding Accent Resources NL or generate 1033.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Citigroup vs. Accent Resources NL
Performance |
| Timeline |
| Citigroup |
| Accent Resources |
Citigroup and Accent Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Accent Resources
The main advantage of trading using opposite Citigroup and Accent Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Accent Resources 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 Accent Resources will offset losses from the drop in Accent Resources' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Accent Resources vs. FORWARD AIR P | Accent Resources vs. Merit Medical Systems | Accent Resources vs. Norwegian Air Shuttle | Accent Resources vs. Clearside Biomedical |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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