Correlation Between Citigroup and DV8 Public
Can any of the company-specific risk be diversified away by investing in both Citigroup and DV8 Public 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 DV8 Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and DV8 Public, you can compare the effects of market volatilities on Citigroup and DV8 Public 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 DV8 Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and DV8 Public.
Diversification Opportunities for Citigroup and DV8 Public
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and DV8 is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and DV8 Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DV8 Public 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 DV8 Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DV8 Public has no effect on the direction of Citigroup i.e., Citigroup and DV8 Public go up and down completely randomly.
Pair Corralation between Citigroup and DV8 Public
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.45 times more return on investment than DV8 Public. However, Citigroup is 2.22 times less risky than DV8 Public. It trades about -0.01 of its potential returns per unit of risk. DV8 Public is currently generating about -0.18 per unit of risk. If you would invest 7,939 in Citigroup on November 29, 2024 and sell it today you would lose (52.00) from holding Citigroup or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. DV8 Public
Performance |
| Timeline |
| Citigroup |
| DV8 Public |
Citigroup and DV8 Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and DV8 Public
The main advantage of trading using opposite Citigroup and DV8 Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, DV8 Public 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 DV8 Public will offset losses from the drop in DV8 Public'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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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