Correlation Between Citigroup and Bentley Systems
Can any of the company-specific risk be diversified away by investing in both Citigroup and Bentley Systems 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 Bentley Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Bentley Systems, you can compare the effects of market volatilities on Citigroup and Bentley Systems 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 Bentley Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Bentley Systems.
Diversification Opportunities for Citigroup and Bentley Systems
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Bentley is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bentley Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bentley Systems 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 Bentley Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bentley Systems has no effect on the direction of Citigroup i.e., Citigroup and Bentley Systems go up and down completely randomly.
Pair Corralation between Citigroup and Bentley Systems
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.24 times more return on investment than Bentley Systems. However, Citigroup is 1.24 times more volatile than Bentley Systems. It trades about 0.23 of its potential returns per unit of risk. Bentley Systems is currently generating about -0.04 per unit of risk. If you would invest 6,255 in Citigroup on August 24, 2024 and sell it today you would earn a total of 729.00 from holding Citigroup or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Bentley Systems
Performance |
| Timeline |
| Citigroup |
| Bentley Systems |
Citigroup and Bentley Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Bentley Systems
The main advantage of trading using opposite Citigroup and Bentley Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Bentley Systems 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 Bentley Systems will offset losses from the drop in Bentley Systems' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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