Correlation Between Citigroup and Box
Can any of the company-specific risk be diversified away by investing in both Citigroup and Box 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 Box into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Box Inc, you can compare the effects of market volatilities on Citigroup and Box 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 Box. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Box.
Diversification Opportunities for Citigroup and Box
Very weak diversification
The 3 months correlation between Citigroup and Box is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Box Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Box Inc 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 Box. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Box Inc has no effect on the direction of Citigroup i.e., Citigroup and Box go up and down completely randomly.
Pair Corralation between Citigroup and Box
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.87 times more return on investment than Box. However, Citigroup is 1.14 times less risky than Box. It trades about 0.07 of its potential returns per unit of risk. Box Inc is currently generating about 0.03 per unit of risk. If you would invest 4,145 in Citigroup on August 27, 2024 and sell it today you would earn a total of 2,839 from holding Citigroup or generate 68.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Box Inc
Performance |
| Timeline |
| Citigroup |
| Box Inc |
Citigroup and Box Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Box
The main advantage of trading using opposite Citigroup and Box positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Box 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 Box will offset losses from the drop in Box's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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