Correlation Between Citigroup and Sierra Bancorp
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sierra Bancorp 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 Sierra Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sierra Bancorp, you can compare the effects of market volatilities on Citigroup and Sierra Bancorp 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 Sierra Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sierra Bancorp.
Diversification Opportunities for Citigroup and Sierra Bancorp
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Sierra is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sierra Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Bancorp 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 Sierra Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Bancorp has no effect on the direction of Citigroup i.e., Citigroup and Sierra Bancorp go up and down completely randomly.
Pair Corralation between Citigroup and Sierra Bancorp
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.39 times less return on investment than Sierra Bancorp. But when comparing it to its historical volatility, Citigroup is 1.43 times less risky than Sierra Bancorp. It trades about 0.06 of its potential returns per unit of risk. Sierra Bancorp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,964 in Sierra Bancorp on August 27, 2024 and sell it today you would earn a total of 1,275 from holding Sierra Bancorp or generate 64.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Sierra Bancorp
Performance |
| Timeline |
| Citigroup |
| Sierra Bancorp |
Citigroup and Sierra Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sierra Bancorp
The main advantage of trading using opposite Citigroup and Sierra Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sierra Bancorp 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 Sierra Bancorp will offset losses from the drop in Sierra Bancorp's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Sierra Bancorp vs. Home Federal Bancorp | Sierra Bancorp vs. First Financial Northwest | Sierra Bancorp vs. First Northwest Bancorp | Sierra Bancorp vs. First Capital |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |