Correlation Between Citigroup and ITAB Shop
Can any of the company-specific risk be diversified away by investing in both Citigroup and ITAB Shop 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 ITAB Shop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and ITAB Shop Concept, you can compare the effects of market volatilities on Citigroup and ITAB Shop 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 ITAB Shop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and ITAB Shop.
Diversification Opportunities for Citigroup and ITAB Shop
Very good diversification
The 3 months correlation between Citigroup and ITAB is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and ITAB Shop Concept in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITAB Shop Concept 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 ITAB Shop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITAB Shop Concept has no effect on the direction of Citigroup i.e., Citigroup and ITAB Shop go up and down completely randomly.
Pair Corralation between Citigroup and ITAB Shop
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.3 times less return on investment than ITAB Shop. But when comparing it to its historical volatility, Citigroup is 2.05 times less risky than ITAB Shop. It trades about 0.08 of its potential returns per unit of risk. ITAB Shop Concept is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 872.00 in ITAB Shop Concept on September 1, 2024 and sell it today you would earn a total of 1,388 from holding ITAB Shop Concept or generate 159.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Citigroup vs. ITAB Shop Concept
Performance |
| Timeline |
| Citigroup |
| ITAB Shop Concept |
Citigroup and ITAB Shop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and ITAB Shop
The main advantage of trading using opposite Citigroup and ITAB Shop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, ITAB Shop 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 ITAB Shop will offset losses from the drop in ITAB Shop's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| ITAB Shop vs. Inwido AB | ITAB Shop vs. Elanders AB | ITAB Shop vs. Byggmax Group AB | ITAB Shop vs. Dustin Group AB |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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