Correlation Between Citigroup and Hammerson PLC
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hammerson PLC 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 Hammerson PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Hammerson PLC, you can compare the effects of market volatilities on Citigroup and Hammerson PLC 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 Hammerson PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hammerson PLC.
Diversification Opportunities for Citigroup and Hammerson PLC
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Hammerson is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hammerson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammerson PLC 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 Hammerson PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammerson PLC has no effect on the direction of Citigroup i.e., Citigroup and Hammerson PLC go up and down completely randomly.
Pair Corralation between Citigroup and Hammerson PLC
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.64 times more return on investment than Hammerson PLC. However, Citigroup is 1.64 times more volatile than Hammerson PLC. It trades about 0.26 of its potential returns per unit of risk. Hammerson PLC is currently generating about 0.07 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Hammerson PLC
Performance |
| Timeline |
| Citigroup |
| Hammerson PLC |
Citigroup and Hammerson PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hammerson PLC
The main advantage of trading using opposite Citigroup and Hammerson PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hammerson PLC 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 Hammerson PLC will offset losses from the drop in Hammerson PLC's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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