Correlation Between Citigroup and Gemina Laboratories
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gemina Laboratories 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 Gemina Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Gemina Laboratories, you can compare the effects of market volatilities on Citigroup and Gemina Laboratories 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 Gemina Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gemina Laboratories.
Diversification Opportunities for Citigroup and Gemina Laboratories
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Gemina is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gemina Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemina Laboratories 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 Gemina Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemina Laboratories has no effect on the direction of Citigroup i.e., Citigroup and Gemina Laboratories go up and down completely randomly.
Pair Corralation between Citigroup and Gemina Laboratories
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.52 times less return on investment than Gemina Laboratories. But when comparing it to its historical volatility, Citigroup is 4.92 times less risky than Gemina Laboratories. It trades about 0.07 of its potential returns per unit of risk. Gemina Laboratories is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Gemina Laboratories on September 4, 2024 and sell it today you would earn a total of 35.00 from holding Gemina Laboratories or generate 159.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Citigroup vs. Gemina Laboratories
Performance |
| Timeline |
| Citigroup |
| Gemina Laboratories |
Citigroup and Gemina Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gemina Laboratories
The main advantage of trading using opposite Citigroup and Gemina Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gemina Laboratories 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 Gemina Laboratories will offset losses from the drop in Gemina Laboratories' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Gemina Laboratories vs. Novo Nordisk AS | Gemina Laboratories vs. Genmab AS | Gemina Laboratories vs. Inhibikase Therapeutics | Gemina Laboratories vs. Purple Biotech |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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