Correlation Between Citigroup and Hermès International
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hermès International 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 Hermès International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Herms International Socit, you can compare the effects of market volatilities on Citigroup and Hermès International 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 Hermès International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hermès International.
Diversification Opportunities for Citigroup and Hermès International
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and Hermès is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Herms International Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herms International Socit 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 Hermès International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herms International Socit has no effect on the direction of Citigroup i.e., Citigroup and Hermès International go up and down completely randomly.
Pair Corralation between Citigroup and Hermès International
Taking into account the 90-day investment horizon Citigroup is expected to generate 70.96 times less return on investment than Hermès International. But when comparing it to its historical volatility, Citigroup is 1.12 times less risky than Hermès International. It trades about 0.0 of its potential returns per unit of risk. Herms International Socit is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 225,500 in Herms International Socit on October 15, 2024 and sell it today you would earn a total of 11,800 from holding Herms International Socit or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
Citigroup vs. Herms International Socit
Performance |
| Timeline |
| Citigroup |
| Herms International Socit |
Citigroup and Hermès International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hermès International
The main advantage of trading using opposite Citigroup and Hermès International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hermès International 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 Hermès International will offset losses from the drop in Hermès International's long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Hermès International vs. Eurasia Mining Plc | Hermès International vs. Mitsui Chemicals | Hermès International vs. Yanzhou Coal Mining | Hermès International vs. SILICON LABORATOR |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |