Correlation Between Citigroup and Henderson Investment
Can any of the company-specific risk be diversified away by investing in both Citigroup and Henderson Investment 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 Henderson Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Henderson Investment Ltd, you can compare the effects of market volatilities on Citigroup and Henderson Investment 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 Henderson Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Henderson Investment.
Diversification Opportunities for Citigroup and Henderson Investment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Henderson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Henderson Investment Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Investment 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 Henderson Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Investment has no effect on the direction of Citigroup i.e., Citigroup and Henderson Investment go up and down completely randomly.
Pair Corralation between Citigroup and Henderson Investment
If you would invest 6,315 in Citigroup on September 2, 2024 and sell it today you would earn a total of 772.00 from holding Citigroup or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Henderson Investment Ltd
Performance |
| Timeline |
| Citigroup |
| Henderson Investment |
Citigroup and Henderson Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Henderson Investment
The main advantage of trading using opposite Citigroup and Henderson Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Henderson Investment 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 Henderson Investment will offset losses from the drop in Henderson Investment's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Henderson Investment vs. Seek Ltd ADR | Henderson Investment vs. TechnoPro Holdings | Henderson Investment vs. Knorr Bremse Aktiengesellschaft | Henderson Investment vs. Nippon Yusen Kabushiki |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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