Correlation Between Citigroup and British Amer
Can any of the company-specific risk be diversified away by investing in both Citigroup and British Amer 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 British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Bailador Technology Invest, you can compare the effects of market volatilities on Citigroup and British Amer 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 British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and British Amer.
Diversification Opportunities for Citigroup and British Amer
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and British is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Bailador Technology Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bailador Technology 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 British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bailador Technology has no effect on the direction of Citigroup i.e., Citigroup and British Amer go up and down completely randomly.
Pair Corralation between Citigroup and British Amer
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.48 times more return on investment than British Amer. However, Citigroup is 1.48 times more volatile than Bailador Technology Invest. It trades about 0.08 of its potential returns per unit of risk. Bailador Technology Invest is currently generating about 0.01 per unit of risk. If you would invest 5,405 in Citigroup on August 29, 2024 and sell it today you would earn a total of 1,570 from holding Citigroup or generate 29.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.05% |
| Values | Daily Returns |
Citigroup vs. Bailador Technology Invest
Performance |
| Timeline |
| Citigroup |
| Bailador Technology |
Citigroup and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and British Amer
The main advantage of trading using opposite Citigroup and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, British Amer 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 British Amer will offset losses from the drop in British Amer's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| British Amer vs. Champion Iron | British Amer vs. Ridley | British Amer vs. Peel Mining | British Amer vs. Australian Dairy Farms |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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