Correlation Between Citigroup and Hove AS
Can any of the company-specific risk be diversified away by investing in both Citigroup and Hove AS 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 Hove AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Hove AS, you can compare the effects of market volatilities on Citigroup and Hove AS 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 Hove AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Hove AS.
Diversification Opportunities for Citigroup and Hove AS
Average diversification
The 3 months correlation between Citigroup and Hove is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Hove AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hove AS 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 Hove AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hove AS has no effect on the direction of Citigroup i.e., Citigroup and Hove AS go up and down completely randomly.
Pair Corralation between Citigroup and Hove AS
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Hove AS. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 1.42 times less risky than Hove AS. The stock trades about -0.08 of its potential returns per unit of risk. The Hove AS is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 330.00 in Hove AS on November 28, 2024 and sell it today you would earn a total of 21.00 from holding Hove AS or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Hove AS
Performance |
| Timeline |
| Citigroup |
| Hove AS |
Citigroup and Hove AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Hove AS
The main advantage of trading using opposite Citigroup and Hove AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Hove AS 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 Hove AS will offset losses from the drop in Hove AS's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Hove AS vs. Novo Nordisk AS | Hove AS vs. Nordea Bank Abp | Hove AS vs. DSV Panalpina AS | Hove AS vs. AP Mller |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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