Correlation Between Citigroup and Facc AG
Can any of the company-specific risk be diversified away by investing in both Citigroup and Facc 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 Facc AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Facc AG, you can compare the effects of market volatilities on Citigroup and Facc 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 Facc AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Facc AG.
Diversification Opportunities for Citigroup and Facc AG
Modest diversification
The 3 months correlation between Citigroup and Facc is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Facc AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Facc 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 Facc AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Facc AG has no effect on the direction of Citigroup i.e., Citigroup and Facc AG go up and down completely randomly.
Pair Corralation between Citigroup and Facc AG
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Facc AG. In addition to that, Citigroup is 1.01 times more volatile than Facc AG. It trades about -0.1 of its total potential returns per unit of risk. Facc AG is currently generating about -0.09 per unit of volatility. If you would invest 735.00 in Facc AG on January 13, 2025 and sell it today you would lose (64.00) from holding Facc AG or give up 8.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Facc AG
Performance |
| Timeline |
| Citigroup |
| Facc AG |
Citigroup and Facc AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Facc AG
The main advantage of trading using opposite Citigroup and Facc AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Facc 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 Facc AG will offset losses from the drop in Facc AG's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. Bank of America |
| Facc AG vs. Voestalpine AG | Facc AG vs. Lenzing Aktiengesellschaft | Facc AG vs. AT S Austria | Facc AG vs. OMV Aktiengesellschaft |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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