Correlation Between Citigroup and The Gabelli
Can any of the company-specific risk be diversified away by investing in both Citigroup and The Gabelli 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 The Gabelli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and The Gabelli Abc, you can compare the effects of market volatilities on Citigroup and The Gabelli 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 The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and The Gabelli.
Diversification Opportunities for Citigroup and The Gabelli
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and The is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and The Gabelli Abc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Abc 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 The Gabelli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Abc has no effect on the direction of Citigroup i.e., Citigroup and The Gabelli go up and down completely randomly.
Pair Corralation between Citigroup and The Gabelli
Taking into account the 90-day investment horizon Citigroup is expected to generate 7.62 times more return on investment than The Gabelli. However, Citigroup is 7.62 times more volatile than The Gabelli Abc. It trades about 0.32 of its potential returns per unit of risk. The Gabelli Abc is currently generating about 0.36 per unit of risk. If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 852.00 from holding Citigroup or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. The Gabelli Abc
Performance |
| Timeline |
| Citigroup |
| Gabelli Abc |
Citigroup and The Gabelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and The Gabelli
The main advantage of trading using opposite Citigroup and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, The Gabelli 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 The Gabelli will offset losses from the drop in The Gabelli's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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