Correlation Between Citigroup and Charter Communications
Can any of the company-specific risk be diversified away by investing in both Citigroup and Charter Communications 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 Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Charter Communications, you can compare the effects of market volatilities on Citigroup and Charter Communications 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Charter Communications.
Diversification Opportunities for Citigroup and Charter Communications
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Charter is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Citigroup i.e., Citigroup and Charter Communications go up and down completely randomly.
Pair Corralation between Citigroup and Charter Communications
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.68 times less return on investment than Charter Communications. But when comparing it to its historical volatility, Citigroup is 1.34 times less risky than Charter Communications. It trades about 0.11 of its potential returns per unit of risk. Charter Communications is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,239 in Charter Communications on August 30, 2024 and sell it today you would earn a total of 722.00 from holding Charter Communications or generate 22.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Citigroup vs. Charter Communications
Performance |
| Timeline |
| Citigroup |
| Charter Communications |
Citigroup and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Charter Communications
The main advantage of trading using opposite Citigroup and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Charter Communications vs. Intelbras SA | Charter Communications vs. Neogrid Participaes SA | Charter Communications vs. Mliuz SA | Charter Communications vs. Locaweb Servios de |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |