Correlation Between Citigroup and COL Financial
Can any of the company-specific risk be diversified away by investing in both Citigroup and COL Financial 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 COL Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and COL Financial Group, you can compare the effects of market volatilities on Citigroup and COL Financial 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 COL Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and COL Financial.
Diversification Opportunities for Citigroup and COL Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and COL is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and COL Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COL Financial Group 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 COL Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COL Financial Group has no effect on the direction of Citigroup i.e., Citigroup and COL Financial go up and down completely randomly.
Pair Corralation between Citigroup and COL Financial
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.84 times more return on investment than COL Financial. However, Citigroup is 1.2 times less risky than COL Financial. It trades about 0.07 of its potential returns per unit of risk. COL Financial Group is currently generating about -0.04 per unit of risk. If you would invest 4,118 in Citigroup on August 29, 2024 and sell it today you would earn a total of 2,898 from holding Citigroup or generate 70.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.51% |
| Values | Daily Returns |
Citigroup vs. COL Financial Group
Performance |
| Timeline |
| Citigroup |
| COL Financial Group |
Citigroup and COL Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and COL Financial
The main advantage of trading using opposite Citigroup and COL Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, COL Financial 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 COL Financial will offset losses from the drop in COL Financial's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| COL Financial vs. VistaREIT | COL Financial vs. Bright Kindle Resources | COL Financial vs. Medco Holdings | COL Financial vs. Allhome Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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