Correlation Between Citigroup and Conestoga Smid
Can any of the company-specific risk be diversified away by investing in both Citigroup and Conestoga Smid 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 Conestoga Smid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Conestoga Smid Cap, you can compare the effects of market volatilities on Citigroup and Conestoga Smid 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 Conestoga Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Conestoga Smid.
Diversification Opportunities for Citigroup and Conestoga Smid
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Conestoga is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Conestoga Smid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga Smid Cap 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 Conestoga Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Smid Cap has no effect on the direction of Citigroup i.e., Citigroup and Conestoga Smid go up and down completely randomly.
Pair Corralation between Citigroup and Conestoga Smid
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.25 times more return on investment than Conestoga Smid. However, Citigroup is 2.25 times more volatile than Conestoga Smid Cap. It trades about -0.08 of its potential returns per unit of risk. Conestoga Smid Cap is currently generating about -0.26 per unit of risk. If you would invest 8,051 in Citigroup on November 28, 2024 and sell it today you would lose (237.00) from holding Citigroup or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Conestoga Smid Cap
Performance |
| Timeline |
| Citigroup |
| Conestoga Smid Cap |
Citigroup and Conestoga Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Conestoga Smid
The main advantage of trading using opposite Citigroup and Conestoga Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Conestoga Smid 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 Conestoga Smid will offset losses from the drop in Conestoga Smid's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Conestoga Smid vs. Fidelity Advisor Technology | Conestoga Smid vs. Red Oak Technology | Conestoga Smid vs. Towpath Technology | Conestoga Smid vs. Hennessy Technology Fund |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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