Correlation Between Citigroup and Ibnsina Pharma
Can any of the company-specific risk be diversified away by investing in both Citigroup and Ibnsina Pharma 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 Ibnsina Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Ibnsina Pharma, you can compare the effects of market volatilities on Citigroup and Ibnsina Pharma 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 Ibnsina Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Ibnsina Pharma.
Diversification Opportunities for Citigroup and Ibnsina Pharma
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Ibnsina is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ibnsina Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibnsina Pharma 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 Ibnsina Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibnsina Pharma has no effect on the direction of Citigroup i.e., Citigroup and Ibnsina Pharma go up and down completely randomly.
Pair Corralation between Citigroup and Ibnsina Pharma
Taking into account the 90-day investment horizon Citigroup is expected to generate 8.26 times less return on investment than Ibnsina Pharma. But when comparing it to its historical volatility, Citigroup is 4.6 times less risky than Ibnsina Pharma. It trades about 0.19 of its potential returns per unit of risk. Ibnsina Pharma is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 561.00 in Ibnsina Pharma on September 19, 2024 and sell it today you would earn a total of 129.00 from holding Ibnsina Pharma or generate 22.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Citigroup vs. Ibnsina Pharma
Performance |
| Timeline |
| Citigroup |
| Ibnsina Pharma |
Citigroup and Ibnsina Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Ibnsina Pharma
The main advantage of trading using opposite Citigroup and Ibnsina Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Ibnsina Pharma 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 Ibnsina Pharma will offset losses from the drop in Ibnsina Pharma'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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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