Correlation Between Citigroup and HQ Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and HQ Global 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 HQ Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and HQ Global Education, you can compare the effects of market volatilities on Citigroup and HQ Global 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 HQ Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and HQ Global.
Diversification Opportunities for Citigroup and HQ Global
Very weak diversification
The 3 months correlation between Citigroup and HQGE is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HQ Global Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HQ Global Education 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 HQ Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HQ Global Education has no effect on the direction of Citigroup i.e., Citigroup and HQ Global go up and down completely randomly.
Pair Corralation between Citigroup and HQ Global
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the HQ Global. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 14.01 times less risky than HQ Global. The stock trades about -0.17 of its potential returns per unit of risk. The HQ Global Education is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.03 in HQ Global Education on January 8, 2025 and sell it today you would earn a total of 0.00 from holding HQ Global Education or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. HQ Global Education
Performance |
| Timeline |
| Citigroup |
| HQ Global Education |
Citigroup and HQ Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and HQ Global
The main advantage of trading using opposite Citigroup and HQ Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, HQ Global 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 HQ Global will offset losses from the drop in HQ Global's long position.| Citigroup vs. Barclays PLC ADR | Citigroup vs. ING Group NV | Citigroup vs. Banco Santander SA | Citigroup vs. HSBC Holdings PLC |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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