Correlation Between Citigroup and BetaPro Canadian
Can any of the company-specific risk be diversified away by investing in both Citigroup and BetaPro Canadian 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 BetaPro Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and BetaPro Canadian Gold, you can compare the effects of market volatilities on Citigroup and BetaPro Canadian 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 BetaPro Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and BetaPro Canadian.
Diversification Opportunities for Citigroup and BetaPro Canadian
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and BetaPro is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BetaPro Canadian Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Canadian Gold 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 BetaPro Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Canadian Gold has no effect on the direction of Citigroup i.e., Citigroup and BetaPro Canadian go up and down completely randomly.
Pair Corralation between Citigroup and BetaPro Canadian
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.18 times less return on investment than BetaPro Canadian. But when comparing it to its historical volatility, Citigroup is 2.15 times less risky than BetaPro Canadian. It trades about 0.07 of its potential returns per unit of risk. BetaPro Canadian Gold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,622 in BetaPro Canadian Gold on October 21, 2024 and sell it today you would earn a total of 741.00 from holding BetaPro Canadian Gold or generate 45.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. BetaPro Canadian Gold
Performance |
| Timeline |
| Citigroup |
| BetaPro Canadian Gold |
Citigroup and BetaPro Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and BetaPro Canadian
The main advantage of trading using opposite Citigroup and BetaPro Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, BetaPro Canadian 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 BetaPro Canadian will offset losses from the drop in BetaPro Canadian's long position.| Citigroup vs. Bank of Montreal | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Nova | Citigroup vs. JPMorgan Chase Co |
| BetaPro Canadian vs. BetaPro Gold Bullion | BetaPro Canadian vs. BetaPro NASDAQ 100 2x | BetaPro Canadian vs. BetaPro SP TSX | BetaPro Canadian vs. BetaPro SP TSX |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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