Correlation Between Citigroup and Absolent Group
Can any of the company-specific risk be diversified away by investing in both Citigroup and Absolent Group 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 Absolent Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Absolent Group AB, you can compare the effects of market volatilities on Citigroup and Absolent Group 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 Absolent Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Absolent Group.
Diversification Opportunities for Citigroup and Absolent Group
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Absolent is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Absolent Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolent Group AB 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 Absolent Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolent Group AB has no effect on the direction of Citigroup i.e., Citigroup and Absolent Group go up and down completely randomly.
Pair Corralation between Citigroup and Absolent Group
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.14 times more return on investment than Absolent Group. However, Citigroup is 1.14 times more volatile than Absolent Group AB. It trades about 0.23 of its potential returns per unit of risk. Absolent Group AB is currently generating about -0.68 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 694.00 from holding Citigroup or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Absolent Group AB
Performance |
| Timeline |
| Citigroup |
| Absolent Group AB |
Citigroup and Absolent Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Absolent Group
The main advantage of trading using opposite Citigroup and Absolent Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Absolent Group 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 Absolent Group will offset losses from the drop in Absolent Group's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Absolent Group vs. AQ Group AB | Absolent Group vs. Troax Group AB | Absolent Group vs. Bufab Holding AB | Absolent Group vs. Beijer Ref AB |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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