Correlation Between Citigroup and Big Yellow
Can any of the company-specific risk be diversified away by investing in both Citigroup and Big Yellow 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 Big Yellow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Big Yellow Group, you can compare the effects of market volatilities on Citigroup and Big Yellow 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 Big Yellow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Big Yellow.
Diversification Opportunities for Citigroup and Big Yellow
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Big is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Big Yellow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Yellow Group 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 Big Yellow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Yellow Group has no effect on the direction of Citigroup i.e., Citigroup and Big Yellow go up and down completely randomly.
Pair Corralation between Citigroup and Big Yellow
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.39 times more return on investment than Big Yellow. However, Citigroup is 1.39 times more volatile than Big Yellow Group. It trades about 0.13 of its potential returns per unit of risk. Big Yellow Group is currently generating about -0.14 per unit of risk. If you would invest 6,092 in Citigroup on September 3, 2024 and sell it today you would earn a total of 995.00 from holding Citigroup or generate 16.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Citigroup vs. Big Yellow Group
Performance |
| Timeline |
| Citigroup |
| Big Yellow Group |
Citigroup and Big Yellow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Big Yellow
The main advantage of trading using opposite Citigroup and Big Yellow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Big Yellow 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 Big Yellow will offset losses from the drop in Big Yellow's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Big Yellow vs. Zoom Video Communications | Big Yellow vs. Choice Hotels International | Big Yellow vs. MELIA HOTELS | Big Yellow vs. NH HOTEL GROUP |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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