Correlation Between Citigroup and Exelixis
Can any of the company-specific risk be diversified away by investing in both Citigroup and Exelixis 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 Exelixis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Exelixis, you can compare the effects of market volatilities on Citigroup and Exelixis 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 Exelixis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Exelixis.
Diversification Opportunities for Citigroup and Exelixis
Very poor diversification
The 3 months correlation between Citigroup and Exelixis is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Exelixis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelixis 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 Exelixis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exelixis has no effect on the direction of Citigroup i.e., Citigroup and Exelixis go up and down completely randomly.
Pair Corralation between Citigroup and Exelixis
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.37 times less return on investment than Exelixis. But when comparing it to its historical volatility, Citigroup is 1.44 times less risky than Exelixis. It trades about 0.23 of its potential returns per unit of risk. Exelixis is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,850 in Exelixis on August 27, 2024 and sell it today you would earn a total of 711.00 from holding Exelixis or generate 24.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Exelixis
Performance |
| Timeline |
| Citigroup |
| Exelixis |
Citigroup and Exelixis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Exelixis
The main advantage of trading using opposite Citigroup and Exelixis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Exelixis 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 Exelixis will offset losses from the drop in Exelixis' long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Exelixis vs. TG Therapeutics | Exelixis vs. Viking Therapeutics | Exelixis vs. Madrigal Pharmaceuticals | Exelixis vs. BioXcel Therapeutics |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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