Correlation Between Citigroup and Hennessy Cornerstone
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hennessy Cornerstone 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 Hennessy Cornerstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Hennessy Nerstone Growth, you can compare the effects of market volatilities on Citigroup and Hennessy Cornerstone 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 Hennessy Cornerstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hennessy Cornerstone.
Diversification Opportunities for Citigroup and Hennessy Cornerstone
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Hennessy is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hennessy Nerstone Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Nerstone Growth 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 Hennessy Cornerstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Nerstone Growth has no effect on the direction of Citigroup i.e., Citigroup and Hennessy Cornerstone go up and down completely randomly.
Pair Corralation between Citigroup and Hennessy Cornerstone
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.86 times more return on investment than Hennessy Cornerstone. However, Citigroup is 1.17 times less risky than Hennessy Cornerstone. It trades about 0.26 of its potential returns per unit of risk. Hennessy Nerstone Growth is currently generating about -0.05 per unit of risk. If you would invest 6,235 in Citigroup on November 2, 2024 and sell it today you would earn a total of 1,951 from holding Citigroup or generate 31.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Hennessy Nerstone Growth
Performance |
| Timeline |
| Citigroup |
| Hennessy Nerstone Growth |
Citigroup and Hennessy Cornerstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hennessy Cornerstone
The main advantage of trading using opposite Citigroup and Hennessy Cornerstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hennessy Cornerstone 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 Hennessy Cornerstone will offset losses from the drop in Hennessy Cornerstone's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Hennessy Cornerstone vs. Hennessy Nerstone Value | Hennessy Cornerstone vs. The Jensen Portfolio | Hennessy Cornerstone vs. Meridian Trarian Fund | Hennessy Cornerstone vs. Clipper Fund Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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