Correlation Between Citigroup and GUD Holdings
Can any of the company-specific risk be diversified away by investing in both Citigroup and GUD Holdings 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 GUD Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and GUD Holdings Ltd, you can compare the effects of market volatilities on Citigroup and GUD Holdings 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 GUD Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and GUD Holdings.
Diversification Opportunities for Citigroup and GUD Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and GUD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and GUD Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUD Holdings 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 GUD Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUD Holdings has no effect on the direction of Citigroup i.e., Citigroup and GUD Holdings go up and down completely randomly.
Pair Corralation between Citigroup and GUD Holdings
Taking into account the 90-day investment horizon Citigroup is expected to generate 8.35 times more return on investment than GUD Holdings. However, Citigroup is 8.35 times more volatile than GUD Holdings Ltd. It trades about 0.07 of its potential returns per unit of risk. GUD Holdings Ltd is currently generating about 0.09 per unit of risk. If you would invest 6,079 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,008 from holding Citigroup or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. GUD Holdings Ltd
Performance |
| Timeline |
| Citigroup |
| GUD Holdings |
Citigroup and GUD Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and GUD Holdings
The main advantage of trading using opposite Citigroup and GUD Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, GUD Holdings 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 GUD Holdings will offset losses from the drop in GUD Holdings' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| GUD Holdings vs. American Axle Manufacturing | GUD Holdings vs. Lear Corporation | GUD Holdings vs. Commercial Vehicle Group | GUD Holdings vs. Adient PLC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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