Correlation Between Citigroup and EVN AG
Can any of the company-specific risk be diversified away by investing in both Citigroup and EVN AG 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 EVN AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and EVN AG, you can compare the effects of market volatilities on Citigroup and EVN AG 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 EVN AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and EVN AG.
Diversification Opportunities for Citigroup and EVN AG
Pay attention - limited upside
The 3 months correlation between Citigroup and EVN is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and EVN AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVN AG 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 EVN AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVN AG has no effect on the direction of Citigroup i.e., Citigroup and EVN AG go up and down completely randomly.
Pair Corralation between Citigroup and EVN AG
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.31 times more return on investment than EVN AG. However, Citigroup is 1.31 times more volatile than EVN AG. It trades about 0.21 of its potential returns per unit of risk. EVN AG is currently generating about -0.15 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. EVN AG
Performance |
| Timeline |
| Citigroup |
| EVN AG |
Citigroup and EVN AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and EVN AG
The main advantage of trading using opposite Citigroup and EVN AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, EVN AG 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 EVN AG will offset losses from the drop in EVN AG's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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