Correlation Between Citigroup and Fraser
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fraser 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 Fraser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fraser and Neave, you can compare the effects of market volatilities on Citigroup and Fraser 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 Fraser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fraser.
Diversification Opportunities for Citigroup and Fraser
Poor diversification
The 3 months correlation between Citigroup and Fraser is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fraser and Neave in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fraser and Neave 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 Fraser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fraser and Neave has no effect on the direction of Citigroup i.e., Citigroup and Fraser go up and down completely randomly.
Pair Corralation between Citigroup and Fraser
If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 852.00 from holding Citigroup or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Fraser and Neave
Performance |
| Timeline |
| Citigroup |
| Fraser and Neave |
Citigroup and Fraser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fraser
The main advantage of trading using opposite Citigroup and Fraser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fraser 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 Fraser will offset losses from the drop in Fraser's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Fraser vs. Kellanova | Fraser vs. Lancaster Colony | Fraser vs. The A2 Milk | Fraser vs. Altavoz Entertainment |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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