Correlation Between Citigroup and City Union
Can any of the company-specific risk be diversified away by investing in both Citigroup and City Union 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 City Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and City Union Bank, you can compare the effects of market volatilities on Citigroup and City Union 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 City Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and City Union.
Diversification Opportunities for Citigroup and City Union
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and City is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and City Union Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Union Bank 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 City Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Union Bank has no effect on the direction of Citigroup i.e., Citigroup and City Union go up and down completely randomly.
Pair Corralation between Citigroup and City Union
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.83 times more return on investment than City Union. However, Citigroup is 1.21 times less risky than City Union. It trades about 0.08 of its potential returns per unit of risk. City Union Bank is currently generating about 0.06 per unit of risk. If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.86% |
| Values | Daily Returns |
Citigroup vs. City Union Bank
Performance |
| Timeline |
| Citigroup |
| City Union Bank |
Citigroup and City Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and City Union
The main advantage of trading using opposite Citigroup and City Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, City Union 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 City Union will offset losses from the drop in City Union's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| City Union vs. ICICI Securities Limited | City Union vs. Nippon Life India | City Union vs. Fortis Healthcare Limited | City Union vs. ICICI Lombard General |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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