Correlation Between Citigroup and First Graphene
Can any of the company-specific risk be diversified away by investing in both Citigroup and First Graphene 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 Graphene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and First Graphene, you can compare the effects of market volatilities on Citigroup and First Graphene 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 Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and First Graphene.
Diversification Opportunities for Citigroup and First Graphene
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and First is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and First Graphene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Graphene 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 Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Graphene has no effect on the direction of Citigroup i.e., Citigroup and First Graphene go up and down completely randomly.
Pair Corralation between Citigroup and First Graphene
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.48 times more return on investment than First Graphene. However, Citigroup is 2.09 times less risky than First Graphene. It trades about 0.32 of its potential returns per unit of risk. First Graphene is currently generating about -0.31 per unit of risk. If you would invest 6,235 in Citigroup on September 5, 2024 and sell it today you would earn a total of 915.00 from holding Citigroup or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. First Graphene
Performance |
| Timeline |
| Citigroup |
| First Graphene |
Citigroup and First Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and First Graphene
The main advantage of trading using opposite Citigroup and First Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, First Graphene 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 Graphene will offset losses from the drop in First Graphene's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| First Graphene vs. Autosports Group | First Graphene vs. Falcon Metals | First Graphene vs. Homeco Daily Needs | First Graphene vs. Carawine Resources Limited |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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