Correlation Between Citigroup and Inventronics
Can any of the company-specific risk be diversified away by investing in both Citigroup and Inventronics 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 Inventronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Inventronics, you can compare the effects of market volatilities on Citigroup and Inventronics 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 Inventronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Inventronics.
Diversification Opportunities for Citigroup and Inventronics
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Inventronics is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Inventronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventronics 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 Inventronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventronics has no effect on the direction of Citigroup i.e., Citigroup and Inventronics go up and down completely randomly.
Pair Corralation between Citigroup and Inventronics
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.13 times more return on investment than Inventronics. However, Citigroup is 1.13 times more volatile than Inventronics. It trades about 0.15 of its potential returns per unit of risk. Inventronics is currently generating about -0.02 per unit of risk. If you would invest 6,205 in Citigroup on August 30, 2024 and sell it today you would earn a total of 811.00 from holding Citigroup or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Citigroup vs. Inventronics
Performance |
| Timeline |
| Citigroup |
| Inventronics |
Citigroup and Inventronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Inventronics
The main advantage of trading using opposite Citigroup and Inventronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Inventronics 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 Inventronics will offset losses from the drop in Inventronics' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Inventronics vs. Cielo Waste Solutions | Inventronics vs. Forstrong Global Income | Inventronics vs. Terreno Resources Corp | Inventronics vs. iShares Canadian HYBrid |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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