Correlation Between Citigroup and Global Fashion
Can any of the company-specific risk be diversified away by investing in both Citigroup and Global Fashion 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 Global Fashion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Global Fashion Group, you can compare the effects of market volatilities on Citigroup and Global Fashion 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 Global Fashion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Global Fashion.
Diversification Opportunities for Citigroup and Global Fashion
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Global is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Global Fashion Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Fashion 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 Global Fashion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Fashion Group has no effect on the direction of Citigroup i.e., Citigroup and Global Fashion go up and down completely randomly.
Pair Corralation between Citigroup and Global Fashion
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.48 times more return on investment than Global Fashion. However, Citigroup is 2.08 times less risky than Global Fashion. It trades about 0.21 of its potential returns per unit of risk. Global Fashion Group is currently generating about -0.11 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Global Fashion Group
Performance |
| Timeline |
| Citigroup |
| Global Fashion Group |
Citigroup and Global Fashion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Global Fashion
The main advantage of trading using opposite Citigroup and Global Fashion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Global Fashion 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 Global Fashion will offset losses from the drop in Global Fashion's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Global Fashion vs. UET United Electronic | Global Fashion vs. CarsalesCom | Global Fashion vs. CARSALESCOM | Global Fashion vs. INTER CARS SA |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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