Correlation Between Citigroup and NV Bekaert
Can any of the company-specific risk be diversified away by investing in both Citigroup and NV Bekaert 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 NV Bekaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and NV Bekaert SA, you can compare the effects of market volatilities on Citigroup and NV Bekaert 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 NV Bekaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NV Bekaert.
Diversification Opportunities for Citigroup and NV Bekaert
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and BEKB is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NV Bekaert SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Bekaert 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 NV Bekaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Bekaert SA has no effect on the direction of Citigroup i.e., Citigroup and NV Bekaert go up and down completely randomly.
Pair Corralation between Citigroup and NV Bekaert
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.23 times more return on investment than NV Bekaert. However, Citigroup is 1.23 times more volatile than NV Bekaert SA. It trades about 0.06 of its potential returns per unit of risk. NV Bekaert SA is currently generating about -0.02 per unit of risk. If you would invest 4,733 in Citigroup on August 27, 2024 and sell it today you would earn a total of 2,251 from holding Citigroup or generate 47.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
Citigroup vs. NV Bekaert SA
Performance |
| Timeline |
| Citigroup |
| NV Bekaert SA |
Citigroup and NV Bekaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and NV Bekaert
The main advantage of trading using opposite Citigroup and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, NV Bekaert 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 NV Bekaert will offset losses from the drop in NV Bekaert's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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