Correlation Between Citigroup and First Community
Can any of the company-specific risk be diversified away by investing in both Citigroup and First Community 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 Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and First Community Bancshares, you can compare the effects of market volatilities on Citigroup and First Community 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 Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and First Community.
Diversification Opportunities for Citigroup and First Community
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and First is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and First Community Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community Banc 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 Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community Banc has no effect on the direction of Citigroup i.e., Citigroup and First Community go up and down completely randomly.
Pair Corralation between Citigroup and First Community
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.01 times less return on investment than First Community. But when comparing it to its historical volatility, Citigroup is 1.83 times less risky than First Community. It trades about 0.33 of its potential returns per unit of risk. First Community Bancshares is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,068 in First Community Bancshares on September 4, 2024 and sell it today you would earn a total of 582.00 from holding First Community Bancshares or generate 14.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Citigroup vs. First Community Bancshares
Performance |
| Timeline |
| Citigroup |
| First Community Banc |
Citigroup and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and First Community
The main advantage of trading using opposite Citigroup and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, First Community 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 Community will offset losses from the drop in First Community's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| First Community vs. FormFactor | First Community vs. CarsalesCom Ltd ADR | First Community vs. Vishay Intertechnology | First Community vs. Taiwan Semiconductor Manufacturing |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |