Correlation Between Citigroup and Falcons Beyond
Can any of the company-specific risk be diversified away by investing in both Citigroup and Falcons Beyond 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 Falcons Beyond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Falcons Beyond Global,, you can compare the effects of market volatilities on Citigroup and Falcons Beyond 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 Falcons Beyond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Falcons Beyond.
Diversification Opportunities for Citigroup and Falcons Beyond
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Falcons is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Falcons Beyond Global, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcons Beyond Global, 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 Falcons Beyond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcons Beyond Global, has no effect on the direction of Citigroup i.e., Citigroup and Falcons Beyond go up and down completely randomly.
Pair Corralation between Citigroup and Falcons Beyond
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.14 times more return on investment than Falcons Beyond. However, Citigroup is 7.31 times less risky than Falcons Beyond. It trades about 0.25 of its potential returns per unit of risk. Falcons Beyond Global, is currently generating about 0.01 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
Citigroup vs. Falcons Beyond Global,
Performance |
| Timeline |
| Citigroup |
| Falcons Beyond Global, |
Citigroup and Falcons Beyond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Falcons Beyond
The main advantage of trading using opposite Citigroup and Falcons Beyond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Falcons Beyond 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 Falcons Beyond will offset losses from the drop in Falcons Beyond's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Falcons Beyond vs. BBB Foods | Falcons Beyond vs. Aegean Airlines SA | Falcons Beyond vs. Drilling Tools International | Falcons Beyond vs. Noble plc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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