Correlation Between Citigroup and Socit BIC
Can any of the company-specific risk be diversified away by investing in both Citigroup and Socit BIC 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 Socit BIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Socit BIC SA, you can compare the effects of market volatilities on Citigroup and Socit BIC 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 Socit BIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Socit BIC.
Diversification Opportunities for Citigroup and Socit BIC
Average diversification
The 3 months correlation between Citigroup and Socit is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Socit BIC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit BIC 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 Socit BIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit BIC SA has no effect on the direction of Citigroup i.e., Citigroup and Socit BIC go up and down completely randomly.
Pair Corralation between Citigroup and Socit BIC
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.29 times more return on investment than Socit BIC. However, Citigroup is 1.29 times more volatile than Socit BIC SA. It trades about 0.22 of its potential returns per unit of risk. Socit BIC SA is currently generating about 0.21 per unit of risk. If you would invest 7,944 in Citigroup on November 18, 2024 and sell it today you would earn a total of 517.00 from holding Citigroup or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Socit BIC SA
Performance |
| Timeline |
| Citigroup |
| Socit BIC SA |
Citigroup and Socit BIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Socit BIC
The main advantage of trading using opposite Citigroup and Socit BIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Socit BIC 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 Socit BIC will offset losses from the drop in Socit BIC's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Socit BIC vs. Imerys SA | Socit BIC vs. Casino Guichard Perrachon | Socit BIC vs. SEB SA | Socit BIC vs. Mtropole Tlvision SA |
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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