Correlation Between Citigroup and Euronav NV
Can any of the company-specific risk be diversified away by investing in both Citigroup and Euronav NV 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 Euronav NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Euronav NV, you can compare the effects of market volatilities on Citigroup and Euronav NV 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 Euronav NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Euronav NV.
Diversification Opportunities for Citigroup and Euronav NV
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Euronav is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Euronav NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronav NV 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 Euronav NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronav NV has no effect on the direction of Citigroup i.e., Citigroup and Euronav NV go up and down completely randomly.
Pair Corralation between Citigroup and Euronav NV
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.4 times more return on investment than Euronav NV. However, Citigroup is 1.4 times more volatile than Euronav NV. It trades about 0.25 of its potential returns per unit of risk. Euronav NV is currently generating about -0.8 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Euronav NV
Performance |
| Timeline |
| Citigroup |
| Euronav NV |
Citigroup and Euronav NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Euronav NV
The main advantage of trading using opposite Citigroup and Euronav NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Euronav NV 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 Euronav NV will offset losses from the drop in Euronav NV's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Euronav NV vs. Ardelyx | Euronav NV vs. Mind Medicine | Euronav NV vs. BioNTech SE | Euronav NV vs. Tenaris SA ADR |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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