Correlation Between Citigroup and First Capital
Can any of the company-specific risk be diversified away by investing in both Citigroup and First Capital 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 First Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and First Capital, you can compare the effects of market volatilities on Citigroup and First Capital 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 First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and First Capital.
Diversification Opportunities for Citigroup and First Capital
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and First is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital 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 First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of Citigroup i.e., Citigroup and First Capital go up and down completely randomly.
Pair Corralation between Citigroup and First Capital
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.73 times more return on investment than First Capital. However, Citigroup is 1.37 times less risky than First Capital. It trades about 0.07 of its potential returns per unit of risk. First Capital is currently generating about 0.05 per unit of risk. If you would invest 4,237 in Citigroup on September 4, 2024 and sell it today you would earn a total of 2,902 from holding Citigroup or generate 68.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.18% |
| Values | Daily Returns |
Citigroup vs. First Capital
Performance |
| Timeline |
| Citigroup |
| First Capital |
Citigroup and First Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and First Capital
The main advantage of trading using opposite Citigroup and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, First Capital 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 First Capital will offset losses from the drop in First Capital's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| First Capital vs. International Bancshares | First Capital vs. Finward Bancorp | First Capital vs. Aquagold International | First Capital vs. Thrivent High Yield |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |