Correlation Between Citigroup and HelloFresh
Can any of the company-specific risk be diversified away by investing in both Citigroup and HelloFresh 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 HelloFresh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and HelloFresh SE, you can compare the effects of market volatilities on Citigroup and HelloFresh 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 HelloFresh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and HelloFresh.
Diversification Opportunities for Citigroup and HelloFresh
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and HelloFresh is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HelloFresh SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HelloFresh SE 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 HelloFresh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HelloFresh SE has no effect on the direction of Citigroup i.e., Citigroup and HelloFresh go up and down completely randomly.
Pair Corralation between Citigroup and HelloFresh
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.33 times more return on investment than HelloFresh. However, Citigroup is 2.99 times less risky than HelloFresh. It trades about 0.12 of its potential returns per unit of risk. HelloFresh SE is currently generating about -0.03 per unit of risk. If you would invest 4,004 in Citigroup on September 12, 2024 and sell it today you would earn a total of 3,200 from holding Citigroup or generate 79.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.7% |
| Values | Daily Returns |
Citigroup vs. HelloFresh SE
Performance |
| Timeline |
| Citigroup |
| HelloFresh SE |
Citigroup and HelloFresh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and HelloFresh
The main advantage of trading using opposite Citigroup and HelloFresh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, HelloFresh 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 HelloFresh will offset losses from the drop in HelloFresh's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| HelloFresh vs. Jollibee Foods Corp | HelloFresh vs. Nathans Famous | HelloFresh vs. Good Times Restaurants | HelloFresh vs. Compass Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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