Correlation Between Citigroup and CS Real
Can any of the company-specific risk be diversified away by investing in both Citigroup and CS Real 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 CS Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and CS Real Estate, you can compare the effects of market volatilities on Citigroup and CS Real 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 CS Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and CS Real.
Diversification Opportunities for Citigroup and CS Real
Average diversification
The 3 months correlation between Citigroup and CSLP is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and CS Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CS Real Estate 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 CS Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CS Real Estate has no effect on the direction of Citigroup i.e., Citigroup and CS Real go up and down completely randomly.
Pair Corralation between Citigroup and CS Real
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the CS Real. In addition to that, Citigroup is 1.38 times more volatile than CS Real Estate. It trades about -0.04 of its total potential returns per unit of risk. CS Real Estate is currently generating about 0.35 per unit of volatility. If you would invest 14,700 in CS Real Estate on September 19, 2024 and sell it today you would earn a total of 1,050 from holding CS Real Estate or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. CS Real Estate
Performance |
| Timeline |
| Citigroup |
| CS Real Estate |
Citigroup and CS Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and CS Real
The main advantage of trading using opposite Citigroup and CS Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, CS Real 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 CS Real will offset losses from the drop in CS Real's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| CS Real vs. SPDR Dow Jones | CS Real vs. Baloise Holding AG | CS Real vs. SPDR FTSE UK | CS Real vs. Banque Cantonale du |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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