Correlation Between Citigroup and Cohen
Can any of the company-specific risk be diversified away by investing in both Citigroup and Cohen 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 Cohen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Cohen Company, you can compare the effects of market volatilities on Citigroup and Cohen 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 Cohen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Cohen.
Diversification Opportunities for Citigroup and Cohen
Excellent diversification
The 3 months correlation between Citigroup and Cohen is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cohen Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Company 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 Cohen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Company has no effect on the direction of Citigroup i.e., Citigroup and Cohen go up and down completely randomly.
Pair Corralation between Citigroup and Cohen
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.27 times less return on investment than Cohen. But when comparing it to its historical volatility, Citigroup is 2.31 times less risky than Cohen. It trades about 0.1 of its potential returns per unit of risk. Cohen Company is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 649.00 in Cohen Company on November 26, 2024 and sell it today you would earn a total of 276.00 from holding Cohen Company or generate 42.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Cohen Company
Performance |
| Timeline |
| Citigroup |
| Cohen Company |
Citigroup and Cohen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Cohen
The main advantage of trading using opposite Citigroup and Cohen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Cohen 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 Cohen will offset losses from the drop in Cohen's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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