Correlation Between Citigroup and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both Citigroup and HANOVER INSURANCE 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 HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and HANOVER INSURANCE, you can compare the effects of market volatilities on Citigroup and HANOVER INSURANCE 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 HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and HANOVER INSURANCE.
Diversification Opportunities for Citigroup and HANOVER INSURANCE
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and HANOVER is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE 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 HANOVER INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANOVER INSURANCE has no effect on the direction of Citigroup i.e., Citigroup and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between Citigroup and HANOVER INSURANCE
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.17 times more return on investment than HANOVER INSURANCE. However, Citigroup is 1.17 times more volatile than HANOVER INSURANCE. It trades about 0.45 of its potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.23 per unit of risk. If you would invest 6,842 in Citigroup on October 20, 2024 and sell it today you would earn a total of 1,157 from holding Citigroup or generate 16.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Citigroup vs. HANOVER INSURANCE
Performance |
| Timeline |
| Citigroup |
| HANOVER INSURANCE |
Citigroup and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and HANOVER INSURANCE
The main advantage of trading using opposite Citigroup and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, HANOVER INSURANCE 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 HANOVER INSURANCE will offset losses from the drop in HANOVER INSURANCE's long position.| Citigroup vs. Bank of Montreal | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Nova | Citigroup vs. JPMorgan Chase Co |
| HANOVER INSURANCE vs. Singapore Telecommunications Limited | HANOVER INSURANCE vs. Cairo Communication SpA | HANOVER INSURANCE vs. SBI Insurance Group | HANOVER INSURANCE vs. Goosehead Insurance |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |