Correlation Between Citigroup and HONEYWELL CDR
Can any of the company-specific risk be diversified away by investing in both Citigroup and HONEYWELL CDR 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 HONEYWELL CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and HONEYWELL CDR, you can compare the effects of market volatilities on Citigroup and HONEYWELL CDR 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 HONEYWELL CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and HONEYWELL CDR.
Diversification Opportunities for Citigroup and HONEYWELL CDR
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and HONEYWELL is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HONEYWELL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HONEYWELL CDR 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 HONEYWELL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HONEYWELL CDR has no effect on the direction of Citigroup i.e., Citigroup and HONEYWELL CDR go up and down completely randomly.
Pair Corralation between Citigroup and HONEYWELL CDR
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.57 times more return on investment than HONEYWELL CDR. However, Citigroup is 1.57 times more volatile than HONEYWELL CDR. It trades about 0.08 of its potential returns per unit of risk. HONEYWELL CDR is currently generating about 0.09 per unit of risk. If you would invest 5,992 in Citigroup on September 2, 2024 and sell it today you would earn a total of 1,095 from holding Citigroup or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. HONEYWELL CDR
Performance |
| Timeline |
| Citigroup |
| HONEYWELL CDR |
Citigroup and HONEYWELL CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and HONEYWELL CDR
The main advantage of trading using opposite Citigroup and HONEYWELL CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, HONEYWELL CDR 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 HONEYWELL CDR will offset losses from the drop in HONEYWELL CDR's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| HONEYWELL CDR vs. DIRTT Environmental Solutions | HONEYWELL CDR vs. Boat Rocker Media | HONEYWELL CDR vs. Highwood Asset Management | HONEYWELL CDR vs. Solid Impact Investments |
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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