Correlation Between Citigroup and Gateway Real
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gateway Real 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 Gateway Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Gateway Real Estate, you can compare the effects of market volatilities on Citigroup and Gateway Real 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 Gateway Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gateway Real.
Diversification Opportunities for Citigroup and Gateway Real
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Gateway is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gateway Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Real Estate 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 Gateway Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Real Estate has no effect on the direction of Citigroup i.e., Citigroup and Gateway Real go up and down completely randomly.
Pair Corralation between Citigroup and Gateway Real
Taking into account the 90-day investment horizon Citigroup is expected to generate 37.52 times less return on investment than Gateway Real. But when comparing it to its historical volatility, Citigroup is 25.03 times less risky than Gateway Real. It trades about 0.1 of its potential returns per unit of risk. Gateway Real Estate is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 62.00 in Gateway Real Estate on October 17, 2024 and sell it today you would earn a total of 21.00 from holding Gateway Real Estate or generate 33.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Citigroup vs. Gateway Real Estate
Performance |
| Timeline |
| Citigroup |
| Gateway Real Estate |
Citigroup and Gateway Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gateway Real
The main advantage of trading using opposite Citigroup and Gateway Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gateway Real 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 Gateway Real will offset losses from the drop in Gateway Real's long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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