Correlation Between Citigroup and Gambling
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gambling 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 Gambling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Gambling Group, you can compare the effects of market volatilities on Citigroup and Gambling 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 Gambling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gambling.
Diversification Opportunities for Citigroup and Gambling
Very poor diversification
The 3 months correlation between Citigroup and Gambling is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gambling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gambling 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 Gambling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gambling Group has no effect on the direction of Citigroup i.e., Citigroup and Gambling go up and down completely randomly.
Pair Corralation between Citigroup and Gambling
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.96 times more return on investment than Gambling. However, Citigroup is 1.04 times less risky than Gambling. It trades about -0.2 of its potential returns per unit of risk. Gambling Group is currently generating about -0.22 per unit of risk. If you would invest 8,461 in Citigroup on January 15, 2025 and sell it today you would lose (2,139) from holding Citigroup or give up 25.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Gambling Group
Performance |
| Timeline |
| Citigroup |
| Gambling Group |
Citigroup and Gambling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gambling
The main advantage of trading using opposite Citigroup and Gambling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gambling 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 Gambling will offset losses from the drop in Gambling's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Gambling vs. Light Wonder | Gambling vs. Everi Holdings | Gambling vs. Inspired Entertainment | Gambling vs. International Game Technology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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