Correlation Between Citigroup and Gatekeeper Systems
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gatekeeper Systems 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 Gatekeeper Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Gatekeeper Systems, you can compare the effects of market volatilities on Citigroup and Gatekeeper Systems 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 Gatekeeper Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gatekeeper Systems.
Diversification Opportunities for Citigroup and Gatekeeper Systems
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Gatekeeper is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gatekeeper Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatekeeper Systems 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 Gatekeeper Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatekeeper Systems has no effect on the direction of Citigroup i.e., Citigroup and Gatekeeper Systems go up and down completely randomly.
Pair Corralation between Citigroup and Gatekeeper Systems
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.25 times less return on investment than Gatekeeper Systems. But when comparing it to its historical volatility, Citigroup is 2.49 times less risky than Gatekeeper Systems. It trades about 0.14 of its potential returns per unit of risk. Gatekeeper Systems is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Gatekeeper Systems on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Gatekeeper Systems or generate 78.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
Citigroup vs. Gatekeeper Systems
Performance |
| Timeline |
| Citigroup |
| Gatekeeper Systems |
Citigroup and Gatekeeper Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gatekeeper Systems
The main advantage of trading using opposite Citigroup and Gatekeeper Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gatekeeper Systems 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 Gatekeeper Systems will offset losses from the drop in Gatekeeper Systems' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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