Correlation Between Citigroup and First Reliance
Can any of the company-specific risk be diversified away by investing in both Citigroup and First Reliance 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 Reliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and First Reliance Bancshares, you can compare the effects of market volatilities on Citigroup and First Reliance 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 Reliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and First Reliance.
Diversification Opportunities for Citigroup and First Reliance
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and First is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and First Reliance Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Reliance Bancshares 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 Reliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Reliance Bancshares has no effect on the direction of Citigroup i.e., Citigroup and First Reliance go up and down completely randomly.
Pair Corralation between Citigroup and First Reliance
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.63 times more return on investment than First Reliance. However, Citigroup is 1.63 times more volatile than First Reliance Bancshares. It trades about 0.1 of its potential returns per unit of risk. First Reliance Bancshares is currently generating about 0.11 per unit of risk. If you would invest 4,357 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,627 from holding Citigroup or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. First Reliance Bancshares
Performance |
| Timeline |
| Citigroup |
| First Reliance Bancshares |
Citigroup and First Reliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and First Reliance
The main advantage of trading using opposite Citigroup and First Reliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, First Reliance 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 Reliance will offset losses from the drop in First Reliance's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| First Reliance vs. Standard Bank Group | First Reliance vs. PSB Holdings | First Reliance vs. United Overseas Bank | First Reliance vs. Turkiye Garanti Bankasi |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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