Correlation Between Citigroup and BKI Investment
Can any of the company-specific risk be diversified away by investing in both Citigroup and BKI Investment 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 BKI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and BKI Investment, you can compare the effects of market volatilities on Citigroup and BKI Investment 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 BKI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and BKI Investment.
Diversification Opportunities for Citigroup and BKI Investment
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and BKI is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BKI Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKI Investment 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 BKI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKI Investment has no effect on the direction of Citigroup i.e., Citigroup and BKI Investment go up and down completely randomly.
Pair Corralation between Citigroup and BKI Investment
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.55 times more return on investment than BKI Investment. However, Citigroup is 3.55 times more volatile than BKI Investment. It trades about 0.23 of its potential returns per unit of risk. BKI Investment is currently generating about 0.05 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. BKI Investment
Performance |
| Timeline |
| Citigroup |
| BKI Investment |
Citigroup and BKI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and BKI Investment
The main advantage of trading using opposite Citigroup and BKI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, BKI Investment 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 BKI Investment will offset losses from the drop in BKI Investment's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| BKI Investment vs. Ainsworth Game Technology | BKI Investment vs. My Foodie Box | BKI Investment vs. Advanced Braking Technology | BKI Investment vs. Beston Global Food |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |