Correlation Between Citigroup and CLEAR CHANNEL
Can any of the company-specific risk be diversified away by investing in both Citigroup and CLEAR CHANNEL 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 CLEAR CHANNEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and CLEAR CHANNEL OHA, you can compare the effects of market volatilities on Citigroup and CLEAR CHANNEL 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 CLEAR CHANNEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and CLEAR CHANNEL.
Diversification Opportunities for Citigroup and CLEAR CHANNEL
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and CLEAR is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and CLEAR CHANNEL OHA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEAR CHANNEL OHA 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 CLEAR CHANNEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEAR CHANNEL OHA has no effect on the direction of Citigroup i.e., Citigroup and CLEAR CHANNEL go up and down completely randomly.
Pair Corralation between Citigroup and CLEAR CHANNEL
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.42 times more return on investment than CLEAR CHANNEL. However, Citigroup is 2.35 times less risky than CLEAR CHANNEL. It trades about 0.06 of its potential returns per unit of risk. CLEAR CHANNEL OHA is currently generating about 0.02 per unit of risk. If you would invest 4,790 in Citigroup on October 13, 2024 and sell it today you would earn a total of 2,350 from holding Citigroup or generate 49.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Citigroup vs. CLEAR CHANNEL OHA
Performance |
| Timeline |
| Citigroup |
| CLEAR CHANNEL OHA |
Citigroup and CLEAR CHANNEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and CLEAR CHANNEL
The main advantage of trading using opposite Citigroup and CLEAR CHANNEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, CLEAR CHANNEL 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 CLEAR CHANNEL will offset losses from the drop in CLEAR CHANNEL's long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| CLEAR CHANNEL vs. Altair Engineering | CLEAR CHANNEL vs. BRAGG GAMING GRP | CLEAR CHANNEL vs. Delta Air Lines | CLEAR CHANNEL vs. Media and Games |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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