Correlation Between Citigroup and Evergent Investments
Can any of the company-specific risk be diversified away by investing in both Citigroup and Evergent Investments 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 Evergent Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Evergent Investments SA, you can compare the effects of market volatilities on Citigroup and Evergent Investments 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 Evergent Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Evergent Investments.
Diversification Opportunities for Citigroup and Evergent Investments
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Evergent is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Evergent Investments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergent Investments 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 Evergent Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergent Investments has no effect on the direction of Citigroup i.e., Citigroup and Evergent Investments go up and down completely randomly.
Pair Corralation between Citigroup and Evergent Investments
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.83 times more return on investment than Evergent Investments. However, Citigroup is 1.83 times more volatile than Evergent Investments SA. It trades about 0.08 of its potential returns per unit of risk. Evergent Investments SA is currently generating about 0.07 per unit of risk. If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Evergent Investments SA
Performance |
| Timeline |
| Citigroup |
| Evergent Investments |
Citigroup and Evergent Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Evergent Investments
The main advantage of trading using opposite Citigroup and Evergent Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Evergent Investments 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 Evergent Investments will offset losses from the drop in Evergent Investments' 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 Stocks Directory module to find actively traded stocks across global markets.
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