Correlation Between Citigroup and B Communications
Can any of the company-specific risk be diversified away by investing in both Citigroup and B Communications 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 B Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and B Communications, you can compare the effects of market volatilities on Citigroup and B Communications 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 B Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and B Communications.
Diversification Opportunities for Citigroup and B Communications
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and BCOMF is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and B Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Communications 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 B Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Communications has no effect on the direction of Citigroup i.e., Citigroup and B Communications go up and down completely randomly.
Pair Corralation between Citigroup and B Communications
If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.27% |
| Values | Daily Returns |
Citigroup vs. B Communications
Performance |
| Timeline |
| Citigroup |
| B Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and B Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and B Communications
The main advantage of trading using opposite Citigroup and B Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, B Communications 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 B Communications will offset losses from the drop in B Communications' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| B Communications vs. Montauk Renewables | B Communications vs. Aegon NV ADR | B Communications vs. Link Real Estate | B Communications vs. Bank of America |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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