Correlation Between Citigroup and Ensurge Micropower
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ensurge Micropower 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 Ensurge Micropower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ensurge Micropower ASA, you can compare the effects of market volatilities on Citigroup and Ensurge Micropower 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 Ensurge Micropower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ensurge Micropower.
Diversification Opportunities for Citigroup and Ensurge Micropower
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Ensurge is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ensurge Micropower ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensurge Micropower ASA 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 Ensurge Micropower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensurge Micropower ASA has no effect on the direction of Citigroup i.e., Citigroup and Ensurge Micropower go up and down completely randomly.
Pair Corralation between Citigroup and Ensurge Micropower
Taking into account the 90-day investment horizon Citigroup is expected to generate 18.96 times less return on investment than Ensurge Micropower. But when comparing it to its historical volatility, Citigroup is 21.05 times less risky than Ensurge Micropower. It trades about 0.12 of its potential returns per unit of risk. Ensurge Micropower ASA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Ensurge Micropower ASA on September 12, 2024 and sell it today you would lose (20.00) from holding Ensurge Micropower ASA or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 70.69% |
| Values | Daily Returns |
Citigroup vs. Ensurge Micropower ASA
Performance |
| Timeline |
| Citigroup |
| Ensurge Micropower ASA |
Citigroup and Ensurge Micropower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Ensurge Micropower
The main advantage of trading using opposite Citigroup and Ensurge Micropower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ensurge Micropower 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 Ensurge Micropower will offset losses from the drop in Ensurge Micropower's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Ensurge Micropower vs. Ouster Inc | Ensurge Micropower vs. Kopin | Ensurge Micropower vs. Vicor | Ensurge Micropower vs. Fabrinet |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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