Correlation Between Citigroup and Fugro NV
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fugro NV 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 Fugro NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fugro NV, you can compare the effects of market volatilities on Citigroup and Fugro NV 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 Fugro NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fugro NV.
Diversification Opportunities for Citigroup and Fugro NV
Excellent diversification
The 3 months correlation between Citigroup and Fugro is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fugro NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fugro NV 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 Fugro NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fugro NV has no effect on the direction of Citigroup i.e., Citigroup and Fugro NV go up and down completely randomly.
Pair Corralation between Citigroup and Fugro NV
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.66 times more return on investment than Fugro NV. However, Citigroup is 1.52 times less risky than Fugro NV. It trades about 0.17 of its potential returns per unit of risk. Fugro NV is currently generating about -0.11 per unit of risk. If you would invest 6,133 in Citigroup on August 28, 2024 and sell it today you would earn a total of 942.00 from holding Citigroup or generate 15.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Fugro NV
Performance |
| Timeline |
| Citigroup |
| Fugro NV |
Citigroup and Fugro NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fugro NV
The main advantage of trading using opposite Citigroup and Fugro NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fugro NV 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 Fugro NV will offset losses from the drop in Fugro NV's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Fugro NV vs. Aalberts Industries NV | Fugro NV vs. SBM Offshore NV | Fugro NV vs. NN Group NV | Fugro NV vs. Randstad NV |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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