Correlation Between Citigroup and BSP Financial
Can any of the company-specific risk be diversified away by investing in both Citigroup and BSP Financial 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 BSP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and BSP Financial Group, you can compare the effects of market volatilities on Citigroup and BSP Financial 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 BSP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and BSP Financial.
Diversification Opportunities for Citigroup and BSP Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and BSP is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BSP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSP Financial Group 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 BSP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSP Financial Group has no effect on the direction of Citigroup i.e., Citigroup and BSP Financial go up and down completely randomly.
Pair Corralation between Citigroup and BSP Financial
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.97 times more return on investment than BSP Financial. However, Citigroup is 1.03 times less risky than BSP Financial. It trades about 0.26 of its potential returns per unit of risk. BSP Financial Group is currently generating about 0.09 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. BSP Financial Group
Performance |
| Timeline |
| Citigroup |
| BSP Financial Group |
Citigroup and BSP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and BSP Financial
The main advantage of trading using opposite Citigroup and BSP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, BSP Financial 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 BSP Financial will offset losses from the drop in BSP Financial's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| BSP Financial vs. Renascor Resources | BSP Financial vs. Havilah Resources | BSP Financial vs. Boss Energy Limited | BSP Financial vs. Red Hill Iron |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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