Correlation Between Citigroup and HCM Acquisition
Can any of the company-specific risk be diversified away by investing in both Citigroup and HCM Acquisition 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 HCM Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and HCM Acquisition Corp, you can compare the effects of market volatilities on Citigroup and HCM Acquisition 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 HCM Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and HCM Acquisition.
Diversification Opportunities for Citigroup and HCM Acquisition
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and HCM is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HCM Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCM Acquisition Corp 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 HCM Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCM Acquisition Corp has no effect on the direction of Citigroup i.e., Citigroup and HCM Acquisition go up and down completely randomly.
Pair Corralation between Citigroup and HCM Acquisition
If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Citigroup vs. HCM Acquisition Corp
Performance |
| Timeline |
| Citigroup |
| HCM Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and HCM Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and HCM Acquisition
The main advantage of trading using opposite Citigroup and HCM Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, HCM Acquisition 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 HCM Acquisition will offset losses from the drop in HCM Acquisition's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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