Correlation Between Citigroup and Inovio Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Citigroup and Inovio Pharmaceuticals 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 Inovio Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Inovio Pharmaceuticals, you can compare the effects of market volatilities on Citigroup and Inovio Pharmaceuticals 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 Inovio Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Inovio Pharmaceuticals.
Diversification Opportunities for Citigroup and Inovio Pharmaceuticals
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Inovio is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Inovio Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inovio Pharmaceuticals 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 Inovio Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inovio Pharmaceuticals has no effect on the direction of Citigroup i.e., Citigroup and Inovio Pharmaceuticals go up and down completely randomly.
Pair Corralation between Citigroup and Inovio Pharmaceuticals
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.61 times more return on investment than Inovio Pharmaceuticals. However, Citigroup is 1.64 times less risky than Inovio Pharmaceuticals. It trades about 0.21 of its potential returns per unit of risk. Inovio Pharmaceuticals is currently generating about -0.36 per unit of risk. If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Inovio Pharmaceuticals
Performance |
| Timeline |
| Citigroup |
| Inovio Pharmaceuticals |
Citigroup and Inovio Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Inovio Pharmaceuticals
The main advantage of trading using opposite Citigroup and Inovio Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Inovio Pharmaceuticals 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 Inovio Pharmaceuticals will offset losses from the drop in Inovio Pharmaceuticals' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Inovio Pharmaceuticals vs. Novavax | Inovio Pharmaceuticals vs. Vaxart Inc | Inovio Pharmaceuticals vs. Enveric Biosciences | Inovio Pharmaceuticals vs. Ocean Biomedical |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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