Correlation Between Citigroup and NamSys
Can any of the company-specific risk be diversified away by investing in both Citigroup and NamSys 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 NamSys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and NamSys Inc, you can compare the effects of market volatilities on Citigroup and NamSys 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 NamSys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NamSys.
Diversification Opportunities for Citigroup and NamSys
Significant diversification
The 3 months correlation between Citigroup and NamSys is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NamSys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NamSys Inc 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 NamSys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NamSys Inc has no effect on the direction of Citigroup i.e., Citigroup and NamSys go up and down completely randomly.
Pair Corralation between Citigroup and NamSys
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.26 times less return on investment than NamSys. But when comparing it to its historical volatility, Citigroup is 1.75 times less risky than NamSys. It trades about 0.07 of its potential returns per unit of risk. NamSys Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 65.00 in NamSys Inc on August 28, 2024 and sell it today you would earn a total of 42.00 from holding NamSys Inc or generate 64.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Citigroup vs. NamSys Inc
Performance |
| Timeline |
| Citigroup |
| NamSys Inc |
Citigroup and NamSys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and NamSys
The main advantage of trading using opposite Citigroup and NamSys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, NamSys 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 NamSys will offset losses from the drop in NamSys' long position.The idea behind Citigroup and NamSys Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NamSys vs. AirIQ Inc | NamSys vs. Renoworks Software | NamSys vs. Quorum Information Technologies | NamSys vs. Redishred Capital Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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