Correlation Between Citigroup and CCCB Bancorp
Can any of the company-specific risk be diversified away by investing in both Citigroup and CCCB Bancorp 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 CCCB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and CCCB Bancorp, you can compare the effects of market volatilities on Citigroup and CCCB Bancorp 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 CCCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and CCCB Bancorp.
Diversification Opportunities for Citigroup and CCCB Bancorp
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and CCCB is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and CCCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCCB Bancorp 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 CCCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCCB Bancorp has no effect on the direction of Citigroup i.e., Citigroup and CCCB Bancorp go up and down completely randomly.
Pair Corralation between Citigroup and CCCB Bancorp
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.33 times less return on investment than CCCB Bancorp. But when comparing it to its historical volatility, Citigroup is 1.63 times less risky than CCCB Bancorp. It trades about 0.26 of its potential returns per unit of risk. CCCB Bancorp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 505.00 in CCCB Bancorp on September 1, 2024 and sell it today you would earn a total of 75.00 from holding CCCB Bancorp or generate 14.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. CCCB Bancorp
Performance |
| Timeline |
| Citigroup |
| CCCB Bancorp |
Citigroup and CCCB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and CCCB Bancorp
The main advantage of trading using opposite Citigroup and CCCB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, CCCB Bancorp 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 CCCB Bancorp will offset losses from the drop in CCCB Bancorp's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| CCCB Bancorp vs. Piraeus Bank SA | CCCB Bancorp vs. Turkiye Garanti Bankasi | CCCB Bancorp vs. Delhi Bank Corp | CCCB Bancorp vs. Uwharrie Capital Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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