Correlation Between Citigroup and Galapagos Recebiveis
Can any of the company-specific risk be diversified away by investing in both Citigroup and Galapagos Recebiveis 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 Galapagos Recebiveis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Galapagos Recebiveis Imobiliarios, you can compare the effects of market volatilities on Citigroup and Galapagos Recebiveis 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 Galapagos Recebiveis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Galapagos Recebiveis.
Diversification Opportunities for Citigroup and Galapagos Recebiveis
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Galapagos is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Galapagos Recebiveis Imobiliar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galapagos Recebiveis 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 Galapagos Recebiveis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galapagos Recebiveis has no effect on the direction of Citigroup i.e., Citigroup and Galapagos Recebiveis go up and down completely randomly.
Pair Corralation between Citigroup and Galapagos Recebiveis
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.17 times more return on investment than Galapagos Recebiveis. However, Citigroup is 2.17 times more volatile than Galapagos Recebiveis Imobiliarios. It trades about 0.08 of its potential returns per unit of risk. Galapagos Recebiveis Imobiliarios is currently generating about -0.05 per unit of risk. If you would invest 4,112 in Citigroup on September 5, 2024 and sell it today you would earn a total of 3,030 from holding Citigroup or generate 73.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Citigroup vs. Galapagos Recebiveis Imobiliar
Performance |
| Timeline |
| Citigroup |
| Galapagos Recebiveis |
Citigroup and Galapagos Recebiveis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Galapagos Recebiveis
The main advantage of trading using opposite Citigroup and Galapagos Recebiveis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Galapagos Recebiveis 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 Galapagos Recebiveis will offset losses from the drop in Galapagos Recebiveis' 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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