Correlation Between Citigroup and Bisalloy Steel
Can any of the company-specific risk be diversified away by investing in both Citigroup and Bisalloy Steel 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 Bisalloy Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Bisalloy Steel Group, you can compare the effects of market volatilities on Citigroup and Bisalloy Steel 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 Bisalloy Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Bisalloy Steel.
Diversification Opportunities for Citigroup and Bisalloy Steel
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Bisalloy is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bisalloy Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bisalloy Steel 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 Bisalloy Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bisalloy Steel Group has no effect on the direction of Citigroup i.e., Citigroup and Bisalloy Steel go up and down completely randomly.
Pair Corralation between Citigroup and Bisalloy Steel
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.37 times more return on investment than Bisalloy Steel. However, Citigroup is 2.69 times less risky than Bisalloy Steel. It trades about 0.23 of its potential returns per unit of risk. Bisalloy Steel Group is currently generating about 0.08 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 694.00 from holding Citigroup or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Bisalloy Steel Group
Performance |
| Timeline |
| Citigroup |
| Bisalloy Steel Group |
Citigroup and Bisalloy Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Bisalloy Steel
The main advantage of trading using opposite Citigroup and Bisalloy Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Bisalloy Steel 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 Bisalloy Steel will offset losses from the drop in Bisalloy Steel's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Bisalloy Steel vs. Northern Star Resources | Bisalloy Steel vs. Evolution Mining | Bisalloy Steel vs. De Grey Mining |
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 CEOs Directory module to screen CEOs from public companies around the world.
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