Correlation Between Citigroup and Brooge Holdings
Can any of the company-specific risk be diversified away by investing in both Citigroup and Brooge Holdings 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 Brooge Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Brooge Holdings, you can compare the effects of market volatilities on Citigroup and Brooge Holdings 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 Brooge Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Brooge Holdings.
Diversification Opportunities for Citigroup and Brooge Holdings
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Brooge is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Brooge Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brooge Holdings 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 Brooge Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brooge Holdings has no effect on the direction of Citigroup i.e., Citigroup and Brooge Holdings go up and down completely randomly.
Pair Corralation between Citigroup and Brooge Holdings
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.29 times more return on investment than Brooge Holdings. However, Citigroup is 3.41 times less risky than Brooge Holdings. It trades about 0.29 of its potential returns per unit of risk. Brooge Holdings is currently generating about -0.18 per unit of risk. If you would invest 6,122 in Citigroup on August 26, 2024 and sell it today you would earn a total of 862.00 from holding Citigroup or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Brooge Holdings
Performance |
| Timeline |
| Citigroup |
| Brooge Holdings |
Citigroup and Brooge Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Brooge Holdings
The main advantage of trading using opposite Citigroup and Brooge Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Brooge Holdings 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 Brooge Holdings will offset losses from the drop in Brooge Holdings' long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Brooge Holdings vs. Teekay | Brooge Holdings vs. Targa Resources | Brooge Holdings vs. Teekay Tankers | Brooge Holdings vs. Dynagas LNG Partners |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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