Correlation Between Citigroup and Heritage NOLA
Can any of the company-specific risk be diversified away by investing in both Citigroup and Heritage NOLA 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 Heritage NOLA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Heritage NOLA Bancorp, you can compare the effects of market volatilities on Citigroup and Heritage NOLA 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 Heritage NOLA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Heritage NOLA.
Diversification Opportunities for Citigroup and Heritage NOLA
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Heritage is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Heritage NOLA Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage NOLA Bancorp 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 Heritage NOLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage NOLA Bancorp has no effect on the direction of Citigroup i.e., Citigroup and Heritage NOLA go up and down completely randomly.
Pair Corralation between Citigroup and Heritage NOLA
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.72 times more return on investment than Heritage NOLA. However, Citigroup is 1.38 times less risky than Heritage NOLA. It trades about 0.13 of its potential returns per unit of risk. Heritage NOLA Bancorp is currently generating about -0.03 per unit of risk. If you would invest 3,863 in Citigroup on September 3, 2024 and sell it today you would earn a total of 3,276 from holding Citigroup or generate 84.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Heritage NOLA Bancorp
Performance |
| Timeline |
| Citigroup |
| Heritage NOLA Bancorp |
Citigroup and Heritage NOLA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Heritage NOLA
The main advantage of trading using opposite Citigroup and Heritage NOLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Heritage NOLA 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 Heritage NOLA will offset losses from the drop in Heritage NOLA's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Heritage NOLA vs. First Hawaiian | Heritage NOLA vs. Central Pacific Financial | Heritage NOLA vs. Territorial Bancorp | Heritage NOLA vs. Comerica |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |