Correlation Between Citigroup and HUDSON TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Citigroup and HUDSON TECHNOLOGY 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 HUDSON TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and HUDSON TECHNOLOGY, you can compare the effects of market volatilities on Citigroup and HUDSON TECHNOLOGY 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 HUDSON TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and HUDSON TECHNOLOGY.
Diversification Opportunities for Citigroup and HUDSON TECHNOLOGY
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and HUDSON is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and HUDSON TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUDSON TECHNOLOGY 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 HUDSON TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUDSON TECHNOLOGY has no effect on the direction of Citigroup i.e., Citigroup and HUDSON TECHNOLOGY go up and down completely randomly.
Pair Corralation between Citigroup and HUDSON TECHNOLOGY
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.34 times more return on investment than HUDSON TECHNOLOGY. However, Citigroup is 2.91 times less risky than HUDSON TECHNOLOGY. It trades about 0.27 of its potential returns per unit of risk. HUDSON TECHNOLOGY is currently generating about -0.16 per unit of risk. If you would invest 6,315 in Citigroup on September 2, 2024 and sell it today you would earn a total of 772.00 from holding Citigroup or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. HUDSON TECHNOLOGY
Performance |
| Timeline |
| Citigroup |
| HUDSON TECHNOLOGY |
Citigroup and HUDSON TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and HUDSON TECHNOLOGY
The main advantage of trading using opposite Citigroup and HUDSON TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, HUDSON TECHNOLOGY 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 HUDSON TECHNOLOGY will offset losses from the drop in HUDSON TECHNOLOGY's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| HUDSON TECHNOLOGY vs. Apple Inc | HUDSON TECHNOLOGY vs. Apple Inc | HUDSON TECHNOLOGY vs. Apple Inc | HUDSON TECHNOLOGY vs. Apple Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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