Correlation Between Citigroup and Forge Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Forge Global 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 Forge Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Forge Global Holdings, you can compare the effects of market volatilities on Citigroup and Forge Global 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 Forge Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Forge Global.
Diversification Opportunities for Citigroup and Forge Global
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Forge is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Forge Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forge Global Holdings 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 Forge Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forge Global Holdings has no effect on the direction of Citigroup i.e., Citigroup and Forge Global go up and down completely randomly.
Pair Corralation between Citigroup and Forge Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.29 times more return on investment than Forge Global. However, Citigroup is 3.47 times less risky than Forge Global. It trades about 0.25 of its potential returns per unit of risk. Forge Global Holdings is currently generating about -0.07 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Forge Global Holdings
Performance |
| Timeline |
| Citigroup |
| Forge Global Holdings |
Citigroup and Forge Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Forge Global
The main advantage of trading using opposite Citigroup and Forge Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Forge Global 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 Forge Global will offset losses from the drop in Forge Global's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Forge Global vs. Scully Royalty | Forge Global vs. Donnelley Financial Solutions | Forge Global vs. Heritage Global | Forge Global vs. Oppenheimer Holdings |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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