Correlation Between Citigroup and Hampton Financial
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hampton Financial 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 Hampton Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Hampton Financial Corp, you can compare the effects of market volatilities on Citigroup and Hampton Financial 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 Hampton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hampton Financial.
Diversification Opportunities for Citigroup and Hampton Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and Hampton is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hampton Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hampton Financial 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 Hampton Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hampton Financial Corp has no effect on the direction of Citigroup i.e., Citigroup and Hampton Financial go up and down completely randomly.
Pair Corralation between Citigroup and Hampton Financial
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.62 times more return on investment than Hampton Financial. However, Citigroup is 1.62 times less risky than Hampton Financial. It trades about 0.08 of its potential returns per unit of risk. Hampton Financial Corp is currently generating about 0.01 per unit of risk. If you would invest 4,142 in Citigroup on December 4, 2024 and sell it today you would earn a total of 3,054 from holding Citigroup or generate 73.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Hampton Financial Corp
Performance |
| Timeline |
| Citigroup |
| Hampton Financial Corp |
Citigroup and Hampton Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hampton Financial
The main advantage of trading using opposite Citigroup and Hampton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hampton Financial 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 Hampton Financial will offset losses from the drop in Hampton Financial's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Hampton Financial vs. Adex Mining | Hampton Financial vs. Profound Medical Corp | Hampton Financial vs. XXIX Metal Corp | Hampton Financial vs. NeXGold Mining Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |