Correlation Between Citigroup and General Silos
Can any of the company-specific risk be diversified away by investing in both Citigroup and General Silos 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 General Silos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and General Silos Storage, you can compare the effects of market volatilities on Citigroup and General Silos 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 General Silos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and General Silos.
Diversification Opportunities for Citigroup and General Silos
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and General is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and General Silos Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Silos Storage 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 General Silos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Silos Storage has no effect on the direction of Citigroup i.e., Citigroup and General Silos go up and down completely randomly.
Pair Corralation between Citigroup and General Silos
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.71 times less return on investment than General Silos. But when comparing it to its historical volatility, Citigroup is 2.02 times less risky than General Silos. It trades about 0.11 of its potential returns per unit of risk. General Silos Storage is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 12,198 in General Silos Storage on September 2, 2024 and sell it today you would earn a total of 7,849 from holding General Silos Storage or generate 64.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.82% |
| Values | Daily Returns |
Citigroup vs. General Silos Storage
Performance |
| Timeline |
| Citigroup |
| General Silos Storage |
Citigroup and General Silos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and General Silos
The main advantage of trading using opposite Citigroup and General Silos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, General Silos 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 General Silos will offset losses from the drop in General Silos' 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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