Correlation Between Citigroup and Arbitrum
Can any of the company-specific risk be diversified away by investing in both Citigroup and Arbitrum 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 Arbitrum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Arbitrum, you can compare the effects of market volatilities on Citigroup and Arbitrum 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 Arbitrum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Arbitrum.
Diversification Opportunities for Citigroup and Arbitrum
Pay attention - limited upside
The 3 months correlation between Citigroup and Arbitrum is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Arbitrum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrum 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 Arbitrum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrum has no effect on the direction of Citigroup i.e., Citigroup and Arbitrum go up and down completely randomly.
Pair Corralation between Citigroup and Arbitrum
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Arbitrum. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 2.53 times less risky than Arbitrum. The stock trades about -0.34 of its potential returns per unit of risk. The Arbitrum is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 43.00 in Arbitrum on December 8, 2024 and sell it today you would lose (3.00) from holding Arbitrum or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Arbitrum
Performance |
| Timeline |
| Citigroup |
| Arbitrum |
Citigroup and Arbitrum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Arbitrum
The main advantage of trading using opposite Citigroup and Arbitrum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Arbitrum 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 Arbitrum will offset losses from the drop in Arbitrum'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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| CEOs Directory Screen CEOs from public companies around the world |