Correlation Between Citigroup and BROOKDALE
Can any of the company-specific risk be diversified away by investing in both Citigroup and BROOKDALE 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 BROOKDALE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and BROOKDALE SR LIVING, you can compare the effects of market volatilities on Citigroup and BROOKDALE 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 BROOKDALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and BROOKDALE.
Diversification Opportunities for Citigroup and BROOKDALE
Pay attention - limited upside
The 3 months correlation between Citigroup and BROOKDALE is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BROOKDALE SR LIVING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROOKDALE SR LIVING 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 BROOKDALE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROOKDALE SR LIVING has no effect on the direction of Citigroup i.e., Citigroup and BROOKDALE go up and down completely randomly.
Pair Corralation between Citigroup and BROOKDALE
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.37 times more return on investment than BROOKDALE. However, Citigroup is 2.72 times less risky than BROOKDALE. It trades about 0.17 of its potential returns per unit of risk. BROOKDALE SR LIVING is currently generating about 0.03 per unit of risk. If you would invest 6,980 in Citigroup on September 12, 2024 and sell it today you would earn a total of 216.00 from holding Citigroup or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. BROOKDALE SR LIVING
Performance |
| Timeline |
| Citigroup |
| BROOKDALE SR LIVING |
Citigroup and BROOKDALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and BROOKDALE
The main advantage of trading using opposite Citigroup and BROOKDALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, BROOKDALE 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 BROOKDALE will offset losses from the drop in BROOKDALE's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| BROOKDALE vs. FARO Technologies | BROOKDALE vs. DELTA AIR LINES | BROOKDALE vs. Altair Engineering | BROOKDALE vs. Digilife Technologies Limited |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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