Correlation Between Citigroup and Dream Unlimited
Can any of the company-specific risk be diversified away by investing in both Citigroup and Dream Unlimited 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 Dream Unlimited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Dream Unlimited Corp, you can compare the effects of market volatilities on Citigroup and Dream Unlimited 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 Dream Unlimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Dream Unlimited.
Diversification Opportunities for Citigroup and Dream Unlimited
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Dream is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Dream Unlimited Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Unlimited Corp 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 Dream Unlimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Unlimited Corp has no effect on the direction of Citigroup i.e., Citigroup and Dream Unlimited go up and down completely randomly.
Pair Corralation between Citigroup and Dream Unlimited
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.73 times more return on investment than Dream Unlimited. However, Citigroup is 1.37 times less risky than Dream Unlimited. It trades about 0.09 of its potential returns per unit of risk. Dream Unlimited Corp is currently generating about 0.01 per unit of risk. If you would invest 4,300 in Citigroup on November 27, 2024 and sell it today you would earn a total of 3,665 from holding Citigroup or generate 85.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Citigroup vs. Dream Unlimited Corp
Performance |
| Timeline |
| Citigroup |
| Dream Unlimited Corp |
Citigroup and Dream Unlimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Dream Unlimited
The main advantage of trading using opposite Citigroup and Dream Unlimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Dream Unlimited 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 Dream Unlimited will offset losses from the drop in Dream Unlimited's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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