Correlation Between Citigroup and Denali Capital
Can any of the company-specific risk be diversified away by investing in both Citigroup and Denali Capital 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 Denali Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Denali Capital Acquisition, you can compare the effects of market volatilities on Citigroup and Denali Capital 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 Denali Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Denali Capital.
Diversification Opportunities for Citigroup and Denali Capital
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Denali is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Denali Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denali Capital Acqui 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 Denali Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denali Capital Acqui has no effect on the direction of Citigroup i.e., Citigroup and Denali Capital go up and down completely randomly.
Pair Corralation between Citigroup and Denali Capital
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.02 times less return on investment than Denali Capital. But when comparing it to its historical volatility, Citigroup is 2.72 times less risky than Denali Capital. It trades about 0.07 of its potential returns per unit of risk. Denali Capital Acquisition is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,024 in Denali Capital Acquisition on August 28, 2024 and sell it today you would earn a total of 136.00 from holding Denali Capital Acquisition or generate 13.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Denali Capital Acquisition
Performance |
| Timeline |
| Citigroup |
| Denali Capital Acqui |
Citigroup and Denali Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Denali Capital
The main advantage of trading using opposite Citigroup and Denali Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Denali Capital 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 Denali Capital will offset losses from the drop in Denali Capital's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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