Correlation Between Citigroup and Central Retail
Can any of the company-specific risk be diversified away by investing in both Citigroup and Central Retail 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 Central Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Central Retail, you can compare the effects of market volatilities on Citigroup and Central Retail 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 Central Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Central Retail.
Diversification Opportunities for Citigroup and Central Retail
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Central is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Central Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Retail 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 Central Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Retail has no effect on the direction of Citigroup i.e., Citigroup and Central Retail go up and down completely randomly.
Pair Corralation between Citigroup and Central Retail
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.98 times more return on investment than Central Retail. However, Citigroup is 1.02 times less risky than Central Retail. It trades about 0.21 of its potential returns per unit of risk. Central Retail is currently generating about 0.19 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Central Retail
Performance |
| Timeline |
| Citigroup |
| Central Retail |
Citigroup and Central Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Central Retail
The main advantage of trading using opposite Citigroup and Central Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Central Retail 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 Central Retail will offset losses from the drop in Central Retail's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Central Retail vs. SCG PACKAGING PCL NVDR | Central Retail vs. CK Power Public | Central Retail vs. Thai Metal Drum | Central Retail vs. Country Group 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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