Correlation Between Citigroup and Gaussin
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gaussin 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 Gaussin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Gaussin, you can compare the effects of market volatilities on Citigroup and Gaussin 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 Gaussin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gaussin.
Diversification Opportunities for Citigroup and Gaussin
Pay attention - limited upside
The 3 months correlation between Citigroup and Gaussin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gaussin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaussin 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 Gaussin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaussin has no effect on the direction of Citigroup i.e., Citigroup and Gaussin go up and down completely randomly.
Pair Corralation between Citigroup and Gaussin
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.9 times less return on investment than Gaussin. But when comparing it to its historical volatility, Citigroup is 8.28 times less risky than Gaussin. It trades about 0.06 of its potential returns per unit of risk. Gaussin is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 31.00 in Gaussin on December 11, 2024 and sell it today you would lose (20.00) from holding Gaussin or give up 64.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.52% |
| Values | Daily Returns |
Citigroup vs. Gaussin
Performance |
| Timeline |
| Citigroup |
| Gaussin |
Citigroup and Gaussin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gaussin
The main advantage of trading using opposite Citigroup and Gaussin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gaussin 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 Gaussin will offset losses from the drop in Gaussin's long position.| Citigroup vs. JPMorgan Chase Co | ||
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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