Correlation Between Citigroup and Grifols SA
Can any of the company-specific risk be diversified away by investing in both Citigroup and Grifols SA 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 Grifols SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Grifols SA ADR, you can compare the effects of market volatilities on Citigroup and Grifols SA 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 Grifols SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Grifols SA.
Diversification Opportunities for Citigroup and Grifols SA
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Grifols is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Grifols SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grifols SA ADR 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 Grifols SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grifols SA ADR has no effect on the direction of Citigroup i.e., Citigroup and Grifols SA go up and down completely randomly.
Pair Corralation between Citigroup and Grifols SA
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.61 times more return on investment than Grifols SA. However, Citigroup is 1.64 times less risky than Grifols SA. It trades about 0.21 of its potential returns per unit of risk. Grifols SA ADR is currently generating about -0.1 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Grifols SA ADR
Performance |
| Timeline |
| Citigroup |
| Grifols SA ADR |
Citigroup and Grifols SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Grifols SA
The main advantage of trading using opposite Citigroup and Grifols SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Grifols SA 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 Grifols SA will offset losses from the drop in Grifols SA's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Grifols SA vs. Novartis AG ADR | Grifols SA vs. AstraZeneca PLC ADR | Grifols SA vs. GlaxoSmithKline PLC ADR | Grifols SA vs. Roche Holding Ltd |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |