Correlation Between Citigroup and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fevertree Drinks 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 Fevertree Drinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fevertree Drinks Plc, you can compare the effects of market volatilities on Citigroup and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fevertree Drinks.
Diversification Opportunities for Citigroup and Fevertree Drinks
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Fevertree is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks Plc 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of Citigroup i.e., Citigroup and Fevertree Drinks go up and down completely randomly.
Pair Corralation between Citigroup and Fevertree Drinks
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.13 times more return on investment than Fevertree Drinks. However, Citigroup is 1.13 times more volatile than Fevertree Drinks Plc. It trades about 0.27 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about -0.11 per unit of risk. If you would invest 6,315 in Citigroup on September 2, 2024 and sell it today you would earn a total of 772.00 from holding Citigroup or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Fevertree Drinks Plc
Performance |
| Timeline |
| Citigroup |
| Fevertree Drinks Plc |
Citigroup and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fevertree Drinks
The main advantage of trading using opposite Citigroup and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Fevertree Drinks vs. Yakult Honsha CoLtd | Fevertree Drinks vs. Coca Cola HBC | Fevertree Drinks vs. Coca Cola Consolidated | Fevertree Drinks vs. Britvic plc |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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