Correlation Between Citigroup and IB Acquisition
Can any of the company-specific risk be diversified away by investing in both Citigroup and IB Acquisition 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 IB Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and IB Acquisition Corp, you can compare the effects of market volatilities on Citigroup and IB Acquisition 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 IB Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and IB Acquisition.
Diversification Opportunities for Citigroup and IB Acquisition
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and IBACR is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and IB Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IB Acquisition Corp 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 IB Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IB Acquisition Corp has no effect on the direction of Citigroup i.e., Citigroup and IB Acquisition go up and down completely randomly.
Pair Corralation between Citigroup and IB Acquisition
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.05 times more return on investment than IB Acquisition. However, Citigroup is 20.64 times less risky than IB Acquisition. It trades about 0.23 of its potential returns per unit of risk. IB Acquisition Corp is currently generating about -0.06 per unit of risk. If you would invest 6,902 in Citigroup on September 13, 2024 and sell it today you would earn a total of 271.00 from holding Citigroup or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Citigroup vs. IB Acquisition Corp
Performance |
| Timeline |
| Citigroup |
| IB Acquisition Corp |
Citigroup and IB Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and IB Acquisition
The main advantage of trading using opposite Citigroup and IB Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, IB Acquisition 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 IB Acquisition will offset losses from the drop in IB Acquisition'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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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