Correlation Between Citigroup and JRW Utility
Can any of the company-specific risk be diversified away by investing in both Citigroup and JRW Utility 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 JRW Utility into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and JRW Utility Public, you can compare the effects of market volatilities on Citigroup and JRW Utility 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 JRW Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and JRW Utility.
Diversification Opportunities for Citigroup and JRW Utility
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and JRW is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and JRW Utility Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JRW Utility Public 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 JRW Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JRW Utility Public has no effect on the direction of Citigroup i.e., Citigroup and JRW Utility go up and down completely randomly.
Pair Corralation between Citigroup and JRW Utility
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.08 times more return on investment than JRW Utility. However, Citigroup is 1.08 times more volatile than JRW Utility Public. It trades about 0.23 of its potential returns per unit of risk. JRW Utility Public is currently generating about -0.22 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 694.00 from holding Citigroup or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. JRW Utility Public
Performance |
| Timeline |
| Citigroup |
| JRW Utility Public |
Citigroup and JRW Utility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and JRW Utility
The main advantage of trading using opposite Citigroup and JRW Utility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, JRW Utility 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 JRW Utility will offset losses from the drop in JRW Utility's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| JRW Utility vs. Kiattana Transport Public | JRW Utility vs. JKN Global Media | JRW Utility vs. JCK International Public | JRW Utility vs. Absolute Clean Energy |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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