Correlation Between Citigroup and Catena AB
Can any of the company-specific risk be diversified away by investing in both Citigroup and Catena AB 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 Catena AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Catena AB, you can compare the effects of market volatilities on Citigroup and Catena AB 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 Catena AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Catena AB.
Diversification Opportunities for Citigroup and Catena AB
Pay attention - limited upside
The 3 months correlation between Citigroup and Catena is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Catena AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena AB 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 Catena AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena AB has no effect on the direction of Citigroup i.e., Citigroup and Catena AB go up and down completely randomly.
Pair Corralation between Citigroup and Catena AB
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.49 times more return on investment than Catena AB. However, Citigroup is 1.49 times more volatile than Catena AB. It trades about 0.26 of its potential returns per unit of risk. Catena AB is currently generating about 0.02 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Citigroup vs. Catena AB
Performance |
| Timeline |
| Citigroup |
| Catena AB |
Citigroup and Catena AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Catena AB
The main advantage of trading using opposite Citigroup and Catena AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Catena AB 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 Catena AB will offset losses from the drop in Catena AB's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Catena AB vs. Fastighets AB Balder | Catena AB vs. Fabege AB | Catena AB vs. Wihlborgs Fastigheter AB | Catena AB vs. AB Sagax |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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