Correlation Between Citigroup and EFFECTOR Therapeutics
Can any of the company-specific risk be diversified away by investing in both Citigroup and EFFECTOR Therapeutics 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 EFFECTOR Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and EFFECTOR Therapeutics, you can compare the effects of market volatilities on Citigroup and EFFECTOR Therapeutics 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 EFFECTOR Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and EFFECTOR Therapeutics.
Diversification Opportunities for Citigroup and EFFECTOR Therapeutics
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and EFFECTOR is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and EFFECTOR Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EFFECTOR Therapeutics 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 EFFECTOR Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EFFECTOR Therapeutics has no effect on the direction of Citigroup i.e., Citigroup and EFFECTOR Therapeutics go up and down completely randomly.
Pair Corralation between Citigroup and EFFECTOR Therapeutics
If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Citigroup vs. EFFECTOR Therapeutics
Performance |
| Timeline |
| Citigroup |
| EFFECTOR Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and EFFECTOR Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and EFFECTOR Therapeutics
The main advantage of trading using opposite Citigroup and EFFECTOR Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, EFFECTOR Therapeutics 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 EFFECTOR Therapeutics will offset losses from the drop in EFFECTOR Therapeutics' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| EFFECTOR Therapeutics vs. Celularity | EFFECTOR Therapeutics vs. Humacyte | EFFECTOR Therapeutics vs. NRx Pharmaceuticals | EFFECTOR Therapeutics vs. Reviva Pharmaceuticals Holdings |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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