Correlation Between Citigroup and Consilium Acquisition
Can any of the company-specific risk be diversified away by investing in both Citigroup and Consilium Acquisition 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 Consilium Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Consilium Acquisition I, you can compare the effects of market volatilities on Citigroup and Consilium Acquisition 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 Consilium Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Consilium Acquisition.
Diversification Opportunities for Citigroup and Consilium Acquisition
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Consilium is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Consilium Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consilium Acquisition 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 Consilium Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consilium Acquisition has no effect on the direction of Citigroup i.e., Citigroup and Consilium Acquisition go up and down completely randomly.
Pair Corralation between Citigroup and Consilium Acquisition
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.07 times more return on investment than Consilium Acquisition. However, Citigroup is 1.07 times more volatile than Consilium Acquisition I. It trades about 0.07 of its potential returns per unit of risk. Consilium Acquisition I is currently generating about 0.02 per unit of risk. If you would invest 4,746 in Citigroup on November 3, 2024 and sell it today you would earn a total of 3,397 from holding Citigroup or generate 71.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Citigroup vs. Consilium Acquisition I
Performance |
| Timeline |
| Citigroup |
| Consilium Acquisition |
Citigroup and Consilium Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Consilium Acquisition
The main advantage of trading using opposite Citigroup and Consilium Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Consilium Acquisition 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 Consilium Acquisition will offset losses from the drop in Consilium Acquisition's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Consilium Acquisition vs. Sonos Inc | Consilium Acquisition vs. CTS Corporation | Consilium Acquisition vs. Vishay Precision Group | Consilium Acquisition vs. nLIGHT Inc |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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