Correlation Between Citigroup and Innovation Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Citigroup and Innovation 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 Innovation Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Innovation Pharmaceuticals, you can compare the effects of market volatilities on Citigroup and Innovation 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 Innovation Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Innovation Pharmaceuticals.
Diversification Opportunities for Citigroup and Innovation Pharmaceuticals
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Innovation is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Innovation Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovation 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 Innovation Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovation Pharmaceuticals has no effect on the direction of Citigroup i.e., Citigroup and Innovation Pharmaceuticals go up and down completely randomly.
Pair Corralation between Citigroup and Innovation Pharmaceuticals
Taking into account the 90-day investment horizon Citigroup is expected to generate 40.03 times less return on investment than Innovation Pharmaceuticals. But when comparing it to its historical volatility, Citigroup is 32.11 times less risky than Innovation Pharmaceuticals. It trades about 0.08 of its potential returns per unit of risk. Innovation Pharmaceuticals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Innovation Pharmaceuticals on September 5, 2024 and sell it today you would lose (1.97) from holding Innovation Pharmaceuticals or give up 98.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Innovation Pharmaceuticals
Performance |
| Timeline |
| Citigroup |
| Innovation Pharmaceuticals |
Citigroup and Innovation Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Innovation Pharmaceuticals
The main advantage of trading using opposite Citigroup and Innovation Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Innovation 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 Innovation Pharmaceuticals will offset losses from the drop in Innovation Pharmaceuticals' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Innovation Pharmaceuticals vs. Cytodyn | Innovation Pharmaceuticals vs. Decision Diagnostics | Innovation Pharmaceuticals vs. Vystar Corp |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |