Correlation Between Citigroup and Eastern Star
Can any of the company-specific risk be diversified away by investing in both Citigroup and Eastern Star 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 Eastern Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Eastern Star Real, you can compare the effects of market volatilities on Citigroup and Eastern Star 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 Eastern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Eastern Star.
Diversification Opportunities for Citigroup and Eastern Star
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Eastern is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Eastern Star Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Star Real 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 Eastern Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Star Real has no effect on the direction of Citigroup i.e., Citigroup and Eastern Star go up and down completely randomly.
Pair Corralation between Citigroup and Eastern Star
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.07 times more return on investment than Eastern Star. However, Citigroup is 1.07 times more volatile than Eastern Star Real. It trades about 0.24 of its potential returns per unit of risk. Eastern Star Real is currently generating about -0.08 per unit of risk. If you would invest 6,245 in Citigroup on August 25, 2024 and sell it today you would earn a total of 739.00 from holding Citigroup or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Eastern Star Real
Performance |
| Timeline |
| Citigroup |
| Eastern Star Real |
Citigroup and Eastern Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Eastern Star
The main advantage of trading using opposite Citigroup and Eastern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Eastern Star 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 Eastern Star will offset losses from the drop in Eastern Star's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Eastern Star vs. Bangkok Land Public | Eastern Star vs. Everland Public | Eastern Star vs. Amata Public | Eastern Star vs. Chonburi Concrete Product |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |