Correlation Between Citigroup and FormPipe Software
Can any of the company-specific risk be diversified away by investing in both Citigroup and FormPipe Software 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 FormPipe Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and FormPipe Software AB, you can compare the effects of market volatilities on Citigroup and FormPipe Software 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 FormPipe Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and FormPipe Software.
Diversification Opportunities for Citigroup and FormPipe Software
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and FormPipe is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and FormPipe Software AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormPipe Software 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 FormPipe Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormPipe Software has no effect on the direction of Citigroup i.e., Citigroup and FormPipe Software go up and down completely randomly.
Pair Corralation between Citigroup and FormPipe Software
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.78 times more return on investment than FormPipe Software. However, Citigroup is 1.28 times less risky than FormPipe Software. It trades about 0.15 of its potential returns per unit of risk. FormPipe Software AB is currently generating about 0.02 per unit of risk. If you would invest 3,705 in Citigroup on August 25, 2024 and sell it today you would earn a total of 3,279 from holding Citigroup or generate 88.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Citigroup vs. FormPipe Software AB
Performance |
| Timeline |
| Citigroup |
| FormPipe Software |
Citigroup and FormPipe Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and FormPipe Software
The main advantage of trading using opposite Citigroup and FormPipe Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, FormPipe Software 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 FormPipe Software will offset losses from the drop in FormPipe Software's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic AB |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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