Correlation Between Citigroup and Drone Volt
Can any of the company-specific risk be diversified away by investing in both Citigroup and Drone Volt 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 Drone Volt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Drone Volt SA, you can compare the effects of market volatilities on Citigroup and Drone Volt 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 Drone Volt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Drone Volt.
Diversification Opportunities for Citigroup and Drone Volt
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Drone is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Drone Volt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Drone Volt SA 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 Drone Volt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Drone Volt SA has no effect on the direction of Citigroup i.e., Citigroup and Drone Volt go up and down completely randomly.
Pair Corralation between Citigroup and Drone Volt
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Drone Volt. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 4.62 times less risky than Drone Volt. The stock trades about -0.09 of its potential returns per unit of risk. The Drone Volt SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 33.00 in Drone Volt SA on January 16, 2025 and sell it today you would earn a total of 15.00 from holding Drone Volt SA or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
Citigroup vs. Drone Volt SA
Performance |
| Timeline |
| Citigroup |
| Drone Volt SA |
Citigroup and Drone Volt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Drone Volt
The main advantage of trading using opposite Citigroup and Drone Volt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Drone Volt 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 Drone Volt will offset losses from the drop in Drone Volt's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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