Correlation Between Citigroup and Cyber Media
Can any of the company-specific risk be diversified away by investing in both Citigroup and Cyber Media 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 Cyber Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Cyber Media Research, you can compare the effects of market volatilities on Citigroup and Cyber Media 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 Cyber Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Cyber Media.
Diversification Opportunities for Citigroup and Cyber Media
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Cyber is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cyber Media Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyber Media Research 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 Cyber Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyber Media Research has no effect on the direction of Citigroup i.e., Citigroup and Cyber Media go up and down completely randomly.
Pair Corralation between Citigroup and Cyber Media
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.41 times more return on investment than Cyber Media. However, Citigroup is 2.45 times less risky than Cyber Media. It trades about -0.04 of its potential returns per unit of risk. Cyber Media Research is currently generating about -0.02 per unit of risk. If you would invest 8,051 in Citigroup on November 28, 2024 and sell it today you would lose (144.00) from holding Citigroup or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Cyber Media Research
Performance |
| Timeline |
| Citigroup |
| Cyber Media Research |
Citigroup and Cyber Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Cyber Media
The main advantage of trading using opposite Citigroup and Cyber Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Cyber Media 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 Cyber Media will offset losses from the drop in Cyber Media's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Cyber Media vs. Industrial Investment Trust | Cyber Media vs. Som Distilleries Breweries | Cyber Media vs. Kalyani Investment | Cyber Media vs. Mask Investments Limited |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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