Correlation Between Citigroup and Electromagnetic Geoservices
Can any of the company-specific risk be diversified away by investing in both Citigroup and Electromagnetic Geoservices 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 Electromagnetic Geoservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Electromagnetic Geoservices ASA, you can compare the effects of market volatilities on Citigroup and Electromagnetic Geoservices 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 Electromagnetic Geoservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Electromagnetic Geoservices.
Diversification Opportunities for Citigroup and Electromagnetic Geoservices
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Electromagnetic is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Electromagnetic Geoservices AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromagnetic Geoservices 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 Electromagnetic Geoservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electromagnetic Geoservices has no effect on the direction of Citigroup i.e., Citigroup and Electromagnetic Geoservices go up and down completely randomly.
Pair Corralation between Citigroup and Electromagnetic Geoservices
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.31 times less return on investment than Electromagnetic Geoservices. But when comparing it to its historical volatility, Citigroup is 4.14 times less risky than Electromagnetic Geoservices. It trades about 0.23 of its potential returns per unit of risk. Electromagnetic Geoservices ASA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 193.00 in Electromagnetic Geoservices ASA on September 13, 2024 and sell it today you would earn a total of 8.00 from holding Electromagnetic Geoservices ASA or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Electromagnetic Geoservices AS
Performance |
| Timeline |
| Citigroup |
| Electromagnetic Geoservices |
Citigroup and Electromagnetic Geoservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Electromagnetic Geoservices
The main advantage of trading using opposite Citigroup and Electromagnetic Geoservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Electromagnetic Geoservices 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 Electromagnetic Geoservices will offset losses from the drop in Electromagnetic Geoservices' 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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