Correlation Between Citigroup and Bioscience Animal
Can any of the company-specific risk be diversified away by investing in both Citigroup and Bioscience Animal 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 Bioscience Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Bioscience Animal Health, you can compare the effects of market volatilities on Citigroup and Bioscience Animal 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 Bioscience Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Bioscience Animal.
Diversification Opportunities for Citigroup and Bioscience Animal
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Bioscience is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bioscience Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioscience Animal Health 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 Bioscience Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioscience Animal Health has no effect on the direction of Citigroup i.e., Citigroup and Bioscience Animal go up and down completely randomly.
Pair Corralation between Citigroup and Bioscience Animal
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.76 times more return on investment than Bioscience Animal. However, Citigroup is 1.32 times less risky than Bioscience Animal. It trades about 0.07 of its potential returns per unit of risk. Bioscience Animal Health is currently generating about -0.07 per unit of risk. If you would invest 4,134 in Citigroup on August 30, 2024 and sell it today you would earn a total of 2,882 from holding Citigroup or generate 69.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.17% |
| Values | Daily Returns |
Citigroup vs. Bioscience Animal Health
Performance |
| Timeline |
| Citigroup |
| Bioscience Animal Health |
Citigroup and Bioscience Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Bioscience Animal
The main advantage of trading using opposite Citigroup and Bioscience Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Bioscience Animal 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 Bioscience Animal will offset losses from the drop in Bioscience Animal's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Bioscience Animal vs. Knight Club Capital | Bioscience Animal vs. Chamni Eye PCL | Bioscience Animal vs. Bless Asset Group | Bioscience Animal vs. CAZ Public |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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