Correlation Between Citigroup and International Business
Can any of the company-specific risk be diversified away by investing in both Citigroup and International Business 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 International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and International Business Machines, you can compare the effects of market volatilities on Citigroup and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and International Business.
Diversification Opportunities for Citigroup and International Business
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and International is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Citigroup i.e., Citigroup and International Business go up and down completely randomly.
Pair Corralation between Citigroup and International Business
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.12 times less return on investment than International Business. In addition to that, Citigroup is 1.07 times more volatile than International Business Machines. It trades about 0.1 of its total potential returns per unit of risk. International Business Machines is currently generating about 0.12 per unit of volatility. If you would invest 14,253 in International Business Machines on August 25, 2024 and sell it today you would earn a total of 6,947 from holding International Business Machines or generate 48.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.28% |
| Values | Daily Returns |
Citigroup vs. International Business Machine
Performance |
| Timeline |
| Citigroup |
| International Business |
Citigroup and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and International Business
The main advantage of trading using opposite Citigroup and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| International Business vs. Accenture plc | International Business vs. Cognizant Technology Solutions | International Business vs. Superior Plus Corp | International Business vs. NMI Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |