Correlation Between Citigroup and GMX
Can any of the company-specific risk be diversified away by investing in both Citigroup and GMX 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 GMX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and GMX, you can compare the effects of market volatilities on Citigroup and GMX 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 GMX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and GMX.
Diversification Opportunities for Citigroup and GMX
Weak diversification
The 3 months correlation between Citigroup and GMX is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and GMX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMX 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 GMX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMX has no effect on the direction of Citigroup i.e., Citigroup and GMX go up and down completely randomly.
Pair Corralation between Citigroup and GMX
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.07 times less return on investment than GMX. But when comparing it to its historical volatility, Citigroup is 2.74 times less risky than GMX. It trades about 0.21 of its potential returns per unit of risk. GMX is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,274 in GMX on August 24, 2024 and sell it today you would earn a total of 723.00 from holding GMX or generate 31.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. GMX
Performance |
| Timeline |
| Citigroup |
| GMX |
Citigroup and GMX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and GMX
The main advantage of trading using opposite Citigroup and GMX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, GMX 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 GMX will offset losses from the drop in GMX's long position.| Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stocks Directory Find actively traded stocks across global markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |