Correlation Between Citigroup and GPS Old
Can any of the company-specific risk be diversified away by investing in both Citigroup and GPS Old 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 GPS Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and GPS Old, you can compare the effects of market volatilities on Citigroup and GPS Old 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 GPS Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and GPS Old.
Diversification Opportunities for Citigroup and GPS Old
Good diversification
The 3 months correlation between Citigroup and GPS is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and GPS Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPS Old 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 GPS Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPS Old has no effect on the direction of Citigroup i.e., Citigroup and GPS Old go up and down completely randomly.
Pair Corralation between Citigroup and GPS Old
If you would invest 7,100 in Citigroup on October 28, 2024 and sell it today you would earn a total of 1,048 from holding Citigroup or generate 14.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Citigroup vs. GPS Old
Performance |
| Timeline |
| Citigroup |
| GPS Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and GPS Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and GPS Old
The main advantage of trading using opposite Citigroup and GPS Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, GPS Old 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 GPS Old will offset losses from the drop in GPS Old's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| GPS Old vs. Abercrombie Fitch | GPS Old vs. Urban Outfitters | GPS Old vs. Foot Locker | GPS Old vs. Childrens Place |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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