Correlation Between Citigroup and Extra Space
Can any of the company-specific risk be diversified away by investing in both Citigroup and Extra Space 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 Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Extra Space Storage, you can compare the effects of market volatilities on Citigroup and Extra Space 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 Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Extra Space.
Diversification Opportunities for Citigroup and Extra Space
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Extra is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Extra Space Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extra Space Storage 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 Extra Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extra Space Storage has no effect on the direction of Citigroup i.e., Citigroup and Extra Space go up and down completely randomly.
Pair Corralation between Citigroup and Extra Space
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.88 times more return on investment than Extra Space. However, Citigroup is 1.14 times less risky than Extra Space. It trades about 0.08 of its potential returns per unit of risk. Extra Space Storage is currently generating about 0.03 per unit of risk. If you would invest 4,377 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,639 from holding Citigroup or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Extra Space Storage
Performance |
| Timeline |
| Citigroup |
| Extra Space Storage |
Citigroup and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Extra Space
The main advantage of trading using opposite Citigroup and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Extra Space 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 Extra Space will offset losses from the drop in Extra Space's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Extra Space vs. CubeSmart | Extra Space vs. National Storage Affiliates | Extra Space vs. Public Storage | Extra Space vs. EastGroup Properties |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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