Correlation Between Citigroup and Cloudweb
Can any of the company-specific risk be diversified away by investing in both Citigroup and Cloudweb 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 Cloudweb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Cloudweb, you can compare the effects of market volatilities on Citigroup and Cloudweb 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 Cloudweb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Cloudweb.
Diversification Opportunities for Citigroup and Cloudweb
Average diversification
The 3 months correlation between Citigroup and Cloudweb is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cloudweb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloudweb 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 Cloudweb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloudweb has no effect on the direction of Citigroup i.e., Citigroup and Cloudweb go up and down completely randomly.
Pair Corralation between Citigroup and Cloudweb
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.16 times more return on investment than Cloudweb. However, Citigroup is 6.19 times less risky than Cloudweb. It trades about 0.21 of its potential returns per unit of risk. Cloudweb is currently generating about 0.01 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Cloudweb
Performance |
| Timeline |
| Citigroup |
| Cloudweb |
Citigroup and Cloudweb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Cloudweb
The main advantage of trading using opposite Citigroup and Cloudweb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Cloudweb 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 Cloudweb will offset losses from the drop in Cloudweb's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Cloudweb vs. Porsche Automobile Holding | Cloudweb vs. Ferrari NV | Cloudweb vs. Toyota Motor | Cloudweb vs. General Motors |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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