Correlation Between Citigroup and Adia Nutrition
Can any of the company-specific risk be diversified away by investing in both Citigroup and Adia Nutrition 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 Adia Nutrition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Adia Nutrition, you can compare the effects of market volatilities on Citigroup and Adia Nutrition 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 Adia Nutrition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Adia Nutrition.
Diversification Opportunities for Citigroup and Adia Nutrition
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Adia is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Adia Nutrition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adia Nutrition 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 Adia Nutrition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adia Nutrition has no effect on the direction of Citigroup i.e., Citigroup and Adia Nutrition go up and down completely randomly.
Pair Corralation between Citigroup and Adia Nutrition
Taking into account the 90-day investment horizon Citigroup is expected to generate 8.98 times less return on investment than Adia Nutrition. But when comparing it to its historical volatility, Citigroup is 13.01 times less risky than Adia Nutrition. It trades about 0.33 of its potential returns per unit of risk. Adia Nutrition is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 0.50 in Adia Nutrition on September 4, 2024 and sell it today you would earn a total of 0.50 from holding Adia Nutrition or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Adia Nutrition
Performance |
| Timeline |
| Citigroup |
| Adia Nutrition |
Citigroup and Adia Nutrition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Adia Nutrition
The main advantage of trading using opposite Citigroup and Adia Nutrition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Adia Nutrition 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 Adia Nutrition will offset losses from the drop in Adia Nutrition's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Adia Nutrition vs. Asia Carbon Industries | Adia Nutrition vs. Allied Energy | Adia Nutrition vs. A1 Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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