Correlation Between Citigroup and Games Workshop
Can any of the company-specific risk be diversified away by investing in both Citigroup and Games Workshop 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 Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Games Workshop Group, you can compare the effects of market volatilities on Citigroup and Games Workshop 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 Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Games Workshop.
Diversification Opportunities for Citigroup and Games Workshop
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Games is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop Group 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 Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of Citigroup i.e., Citigroup and Games Workshop go up and down completely randomly.
Pair Corralation between Citigroup and Games Workshop
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.21 times less return on investment than Games Workshop. But when comparing it to its historical volatility, Citigroup is 1.44 times less risky than Games Workshop. It trades about 0.08 of its potential returns per unit of risk. Games Workshop Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10,088 in Games Workshop Group on August 31, 2024 and sell it today you would earn a total of 6,812 from holding Games Workshop Group or generate 67.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.16% |
| Values | Daily Returns |
Citigroup vs. Games Workshop Group
Performance |
| Timeline |
| Citigroup |
| Games Workshop Group |
Citigroup and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Games Workshop
The main advantage of trading using opposite Citigroup and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Games Workshop 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 Games Workshop will offset losses from the drop in Games Workshop's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc | Games Workshop vs. Apple Inc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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