Correlation Between Citigroup and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both Citigroup and Safestore Holdings 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 Safestore Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Safestore Holdings plc, you can compare the effects of market volatilities on Citigroup and Safestore Holdings 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 Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Safestore Holdings.
Diversification Opportunities for Citigroup and Safestore Holdings
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Safestore is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings plc 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 Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of Citigroup i.e., Citigroup and Safestore Holdings go up and down completely randomly.
Pair Corralation between Citigroup and Safestore Holdings
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.93 times more return on investment than Safestore Holdings. However, Citigroup is 1.08 times less risky than Safestore Holdings. It trades about 0.1 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.05 per unit of risk. If you would invest 4,878 in Citigroup on October 16, 2024 and sell it today you would earn a total of 2,399 from holding Citigroup or generate 49.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.25% |
| Values | Daily Returns |
Citigroup vs. Safestore Holdings plc
Performance |
| Timeline |
| Citigroup |
| Safestore Holdings plc |
Citigroup and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Safestore Holdings
The main advantage of trading using opposite Citigroup and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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