Correlation Between Citigroup and GI Group
Can any of the company-specific risk be diversified away by investing in both Citigroup and GI Group 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 GI Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and GI Group Poland, you can compare the effects of market volatilities on Citigroup and GI Group 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 GI Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and GI Group.
Diversification Opportunities for Citigroup and GI Group
Excellent diversification
The 3 months correlation between Citigroup and GIG is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and GI Group Poland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GI Group Poland 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 GI Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GI Group Poland has no effect on the direction of Citigroup i.e., Citigroup and GI Group go up and down completely randomly.
Pair Corralation between Citigroup and GI Group
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.66 times more return on investment than GI Group. However, Citigroup is 1.52 times less risky than GI Group. It trades about 0.08 of its potential returns per unit of risk. GI Group Poland is currently generating about 0.01 per unit of risk. If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Citigroup vs. GI Group Poland
Performance |
| Timeline |
| Citigroup |
| GI Group Poland |
Citigroup and GI Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and GI Group
The main advantage of trading using opposite Citigroup and GI Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, GI Group 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 GI Group will offset losses from the drop in GI Group'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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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