Correlation Between Citigroup and Grand Canyon
Can any of the company-specific risk be diversified away by investing in both Citigroup and Grand Canyon 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 Grand Canyon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Grand Canyon Education, you can compare the effects of market volatilities on Citigroup and Grand Canyon 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 Grand Canyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Grand Canyon.
Diversification Opportunities for Citigroup and Grand Canyon
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Grand is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education 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 Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of Citigroup i.e., Citigroup and Grand Canyon go up and down completely randomly.
Pair Corralation between Citigroup and Grand Canyon
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.02 times less return on investment than Grand Canyon. But when comparing it to its historical volatility, Citigroup is 1.11 times less risky than Grand Canyon. It trades about 0.08 of its potential returns per unit of risk. Grand Canyon Education is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9,800 in Grand Canyon Education on August 31, 2024 and sell it today you would earn a total of 5,700 from holding Grand Canyon Education or generate 58.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.16% |
| Values | Daily Returns |
Citigroup vs. Grand Canyon Education
Performance |
| Timeline |
| Citigroup |
| Grand Canyon Education |
Citigroup and Grand Canyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Grand Canyon
The main advantage of trading using opposite Citigroup and Grand Canyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Grand Canyon 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 Grand Canyon will offset losses from the drop in Grand Canyon's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Grand Canyon vs. Aedas Homes SA | Grand Canyon vs. MTI WIRELESS EDGE | Grand Canyon vs. Haier Smart Home | Grand Canyon vs. CENTURIA OFFICE REIT |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |