Correlation Between Citigroup and Elbit Medical
Can any of the company-specific risk be diversified away by investing in both Citigroup and Elbit Medical 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 Elbit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Elbit Medical Technologies, you can compare the effects of market volatilities on Citigroup and Elbit Medical 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 Elbit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Elbit Medical.
Diversification Opportunities for Citigroup and Elbit Medical
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Elbit is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Elbit Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Medical Techno 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 Elbit Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Medical Techno has no effect on the direction of Citigroup i.e., Citigroup and Elbit Medical go up and down completely randomly.
Pair Corralation between Citigroup and Elbit Medical
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.51 times more return on investment than Elbit Medical. However, Citigroup is 1.95 times less risky than Elbit Medical. It trades about 0.2 of its potential returns per unit of risk. Elbit Medical Technologies is currently generating about -0.14 per unit of risk. If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 78.26% |
| Values | Daily Returns |
Citigroup vs. Elbit Medical Technologies
Performance |
| Timeline |
| Citigroup |
| Elbit Medical Techno |
Citigroup and Elbit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Elbit Medical
The main advantage of trading using opposite Citigroup and Elbit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Elbit Medical 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 Elbit Medical will offset losses from the drop in Elbit Medical's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Elbit Medical vs. Nice | Elbit Medical vs. The Gold Bond | Elbit Medical vs. Bank Leumi Le Israel | Elbit Medical vs. ICL Israel Chemicals |
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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