Correlation Between Citigroup and Henry Schein
Can any of the company-specific risk be diversified away by investing in both Citigroup and Henry Schein 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 Henry Schein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Henry Schein, you can compare the effects of market volatilities on Citigroup and Henry Schein 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 Henry Schein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Henry Schein.
Diversification Opportunities for Citigroup and Henry Schein
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Henry is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Henry Schein in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henry Schein 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 Henry Schein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henry Schein has no effect on the direction of Citigroup i.e., Citigroup and Henry Schein go up and down completely randomly.
Pair Corralation between Citigroup and Henry Schein
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.1 times more return on investment than Henry Schein. However, Citigroup is 1.1 times more volatile than Henry Schein. It trades about 0.13 of its potential returns per unit of risk. Henry Schein is currently generating about 0.13 per unit of risk. If you would invest 6,092 in Citigroup on September 3, 2024 and sell it today you would earn a total of 995.00 from holding Citigroup or generate 16.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Citigroup vs. Henry Schein
Performance |
| Timeline |
| Citigroup |
| Henry Schein |
Citigroup and Henry Schein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Henry Schein
The main advantage of trading using opposite Citigroup and Henry Schein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Henry Schein 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 Henry Schein will offset losses from the drop in Henry Schein's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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