Correlation Between Citigroup and Highest Performances
Can any of the company-specific risk be diversified away by investing in both Citigroup and Highest Performances 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 Highest Performances into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Highest Performances Holdings, you can compare the effects of market volatilities on Citigroup and Highest Performances 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 Highest Performances. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Highest Performances.
Diversification Opportunities for Citigroup and Highest Performances
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Highest is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Highest Performances Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highest Performances 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 Highest Performances. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highest Performances has no effect on the direction of Citigroup i.e., Citigroup and Highest Performances go up and down completely randomly.
Pair Corralation between Citigroup and Highest Performances
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.43 times more return on investment than Highest Performances. However, Citigroup is 2.34 times less risky than Highest Performances. It trades about 0.26 of its potential returns per unit of risk. Highest Performances Holdings is currently generating about -0.2 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Highest Performances Holdings
Performance |
| Timeline |
| Citigroup |
| Highest Performances |
Citigroup and Highest Performances Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Highest Performances
The main advantage of trading using opposite Citigroup and Highest Performances positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Highest Performances 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 Highest Performances will offset losses from the drop in Highest Performances' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Highest Performances vs. Radcom | Highest Performances vs. BCE Inc | Highest Performances vs. Universal Display | Highest Performances vs. Western Digital |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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