Correlation Between Citigroup and Hoist Finance
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hoist Finance 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 Hoist Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Hoist Finance AB, you can compare the effects of market volatilities on Citigroup and Hoist Finance 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 Hoist Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hoist Finance.
Diversification Opportunities for Citigroup and Hoist Finance
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Hoist is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hoist Finance AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoist Finance AB 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 Hoist Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoist Finance AB has no effect on the direction of Citigroup i.e., Citigroup and Hoist Finance go up and down completely randomly.
Pair Corralation between Citigroup and Hoist Finance
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.69 times less return on investment than Hoist Finance. But when comparing it to its historical volatility, Citigroup is 1.78 times less risky than Hoist Finance. It trades about 0.07 of its potential returns per unit of risk. Hoist Finance AB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,522 in Hoist Finance AB on August 26, 2024 and sell it today you would earn a total of 7,148 from holding Hoist Finance AB or generate 283.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Citigroup vs. Hoist Finance AB
Performance |
| Timeline |
| Citigroup |
| Hoist Finance AB |
Citigroup and Hoist Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hoist Finance
The main advantage of trading using opposite Citigroup and Hoist Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hoist Finance 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 Hoist Finance will offset losses from the drop in Hoist Finance's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Hoist Finance vs. Intrum Justitia AB | Hoist Finance vs. Inwido AB | Hoist Finance vs. Resurs Holding AB | Hoist Finance vs. Cloetta AB |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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