Correlation Between Citigroup and Heritage Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Heritage Global 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 Heritage Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Heritage Global, you can compare the effects of market volatilities on Citigroup and Heritage Global 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 Heritage Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Heritage Global.
Diversification Opportunities for Citigroup and Heritage Global
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and Heritage is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Heritage Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Global 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 Heritage Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Global has no effect on the direction of Citigroup i.e., Citigroup and Heritage Global go up and down completely randomly.
Pair Corralation between Citigroup and Heritage Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.86 times more return on investment than Heritage Global. However, Citigroup is 1.17 times less risky than Heritage Global. It trades about 0.21 of its potential returns per unit of risk. Heritage Global is currently generating about 0.01 per unit of risk. 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 | 100.0% |
| Values | Daily Returns |
Citigroup vs. Heritage Global
Performance |
| Timeline |
| Citigroup |
| Heritage Global |
Citigroup and Heritage Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Heritage Global
The main advantage of trading using opposite Citigroup and Heritage Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Heritage Global 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 Heritage Global will offset losses from the drop in Heritage Global's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Heritage Global vs. Scully Royalty | Heritage Global vs. Mercurity Fintech Holding | Heritage Global vs. Donnelley Financial Solutions | Heritage Global vs. Oppenheimer 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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