Correlation Between Citigroup and Arctic Fish
Can any of the company-specific risk be diversified away by investing in both Citigroup and Arctic Fish 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 Arctic Fish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Arctic Fish Holding, you can compare the effects of market volatilities on Citigroup and Arctic Fish 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 Arctic Fish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Arctic Fish.
Diversification Opportunities for Citigroup and Arctic Fish
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Arctic is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Arctic Fish Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Fish 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 Arctic Fish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Fish Holding has no effect on the direction of Citigroup i.e., Citigroup and Arctic Fish go up and down completely randomly.
Pair Corralation between Citigroup and Arctic Fish
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.48 times more return on investment than Arctic Fish. However, Citigroup is 2.09 times less risky than Arctic Fish. It trades about 0.26 of its potential returns per unit of risk. Arctic Fish Holding is currently generating about 0.01 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Citigroup vs. Arctic Fish Holding
Performance |
| Timeline |
| Citigroup |
| Arctic Fish Holding |
Citigroup and Arctic Fish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Arctic Fish
The main advantage of trading using opposite Citigroup and Arctic Fish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Arctic Fish 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 Arctic Fish will offset losses from the drop in Arctic Fish's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Arctic Fish vs. Andfjord Salmon AS | Arctic Fish vs. Elkem ASA | Arctic Fish vs. Integrated Wind Solutions | Arctic Fish vs. Vow 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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