Correlation Between Citigroup and ADS Maritime
Can any of the company-specific risk be diversified away by investing in both Citigroup and ADS Maritime 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 ADS Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and ADS Maritime Holding, you can compare the effects of market volatilities on Citigroup and ADS Maritime 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 ADS Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ADS Maritime.
Diversification Opportunities for Citigroup and ADS Maritime
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and ADS is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ADS Maritime Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADS Maritime Holding 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 ADS Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADS Maritime Holding has no effect on the direction of Citigroup i.e., Citigroup and ADS Maritime go up and down completely randomly.
Pair Corralation between Citigroup and ADS Maritime
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.62 times more return on investment than ADS Maritime. However, Citigroup is 1.61 times less risky than ADS Maritime. It trades about 0.08 of its potential returns per unit of risk. ADS Maritime Holding is currently generating about 0.01 per unit of risk. If you would invest 4,054 in Citigroup on September 12, 2024 and sell it today you would earn a total of 3,196 from holding Citigroup or generate 78.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Citigroup vs. ADS Maritime Holding
Performance |
| Timeline |
| Citigroup |
| ADS Maritime Holding |
Citigroup and ADS Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and ADS Maritime
The main advantage of trading using opposite Citigroup and ADS Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, ADS Maritime 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 ADS Maritime will offset losses from the drop in ADS Maritime's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| ADS Maritime vs. Havila Shipping ASA | ADS Maritime vs. Shelf Drilling | ADS Maritime vs. Solstad Offsho | ADS Maritime vs. Eidesvik Offshore ASA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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