Correlation Between Citigroup and Europac International
Can any of the company-specific risk be diversified away by investing in both Citigroup and Europac International 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 Europac International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Europac International Dividend, you can compare the effects of market volatilities on Citigroup and Europac International 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 Europac International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Europac International.
Diversification Opportunities for Citigroup and Europac International
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Europac is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Europac International Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europac International 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 Europac International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europac International has no effect on the direction of Citigroup i.e., Citigroup and Europac International go up and down completely randomly.
Pair Corralation between Citigroup and Europac International
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.54 times more return on investment than Europac International. However, Citigroup is 2.54 times more volatile than Europac International Dividend. It trades about 0.26 of its potential returns per unit of risk. Europac International Dividend is currently generating about -0.15 per unit of risk. 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 | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Europac International Dividend
Performance |
| Timeline |
| Citigroup |
| Europac International |
Citigroup and Europac International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Europac International
The main advantage of trading using opposite Citigroup and Europac International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Europac International 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 Europac International will offset losses from the drop in Europac International's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Europac International vs. Europac International Value | Europac International vs. Ep Emerging Markets | Europac International vs. Europac Gold Fund | Europac International vs. Europac International Bond |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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