Correlation Between Citigroup and Pop Culture
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pop Culture 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 Pop Culture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pop Culture Group, you can compare the effects of market volatilities on Citigroup and Pop Culture 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 Pop Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pop Culture.
Diversification Opportunities for Citigroup and Pop Culture
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Pop is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pop Culture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pop Culture 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 Pop Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pop Culture Group has no effect on the direction of Citigroup i.e., Citigroup and Pop Culture go up and down completely randomly.
Pair Corralation between Citigroup and Pop Culture
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.66 times more return on investment than Pop Culture. However, Citigroup is 1.51 times less risky than Pop Culture. It trades about 0.21 of its potential returns per unit of risk. Pop Culture Group is currently generating about -0.06 per unit of risk. If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Pop Culture Group
Performance |
| Timeline |
| Citigroup |
| Pop Culture Group |
Citigroup and Pop Culture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pop Culture
The main advantage of trading using opposite Citigroup and Pop Culture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pop Culture 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 Pop Culture will offset losses from the drop in Pop Culture's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Pop Culture vs. News Corp A | Pop Culture vs. Marcus | Pop Culture vs. Liberty Media | Pop Culture vs. Fox Corp Class |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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