Correlation Between Citigroup and Catalyst Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Citigroup and Catalyst Pharmaceuticals 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 Catalyst Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Catalyst Pharmaceuticals, you can compare the effects of market volatilities on Citigroup and Catalyst Pharmaceuticals 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 Catalyst Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Catalyst Pharmaceuticals.
Diversification Opportunities for Citigroup and Catalyst Pharmaceuticals
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Catalyst is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Catalyst Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Pharmaceuticals 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 Catalyst Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Pharmaceuticals has no effect on the direction of Citigroup i.e., Citigroup and Catalyst Pharmaceuticals go up and down completely randomly.
Pair Corralation between Citigroup and Catalyst Pharmaceuticals
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.09 times more return on investment than Catalyst Pharmaceuticals. However, Citigroup is 1.09 times more volatile than Catalyst Pharmaceuticals. It trades about 0.17 of its potential returns per unit of risk. Catalyst Pharmaceuticals is currently generating about 0.08 per unit of risk. If you would invest 6,117 in Citigroup on August 27, 2024 and sell it today you would earn a total of 958.00 from holding Citigroup or generate 15.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Catalyst Pharmaceuticals
Performance |
| Timeline |
| Citigroup |
| Catalyst Pharmaceuticals |
Citigroup and Catalyst Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Catalyst Pharmaceuticals
The main advantage of trading using opposite Citigroup and Catalyst Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Catalyst Pharmaceuticals 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 Catalyst Pharmaceuticals will offset losses from the drop in Catalyst Pharmaceuticals' long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Catalyst Pharmaceuticals vs. Eliem Therapeutics | Catalyst Pharmaceuticals vs. HCW Biologics | Catalyst Pharmaceuticals vs. Scpharmaceuticals | Catalyst Pharmaceuticals vs. Milestone Pharmaceuticals |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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