Correlation Between Citigroup and JEMTEC
Can any of the company-specific risk be diversified away by investing in both Citigroup and JEMTEC 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 JEMTEC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and JEMTEC Inc, you can compare the effects of market volatilities on Citigroup and JEMTEC 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 JEMTEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and JEMTEC.
Diversification Opportunities for Citigroup and JEMTEC
Poor diversification
The 3 months correlation between Citigroup and JEMTEC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and JEMTEC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JEMTEC Inc 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 JEMTEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JEMTEC Inc has no effect on the direction of Citigroup i.e., Citigroup and JEMTEC go up and down completely randomly.
Pair Corralation between Citigroup and JEMTEC
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.46 times more return on investment than JEMTEC. However, Citigroup is 2.17 times less risky than JEMTEC. It trades about 0.08 of its potential returns per unit of risk. JEMTEC Inc is currently generating about 0.01 per unit of risk. If you would invest 4,091 in Citigroup on September 14, 2024 and sell it today you would earn a total of 3,105 from holding Citigroup or generate 75.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Citigroup vs. JEMTEC Inc
Performance |
| Timeline |
| Citigroup |
| JEMTEC Inc |
Citigroup and JEMTEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and JEMTEC
The main advantage of trading using opposite Citigroup and JEMTEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, JEMTEC 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 JEMTEC will offset losses from the drop in JEMTEC's long position.The idea behind Citigroup and JEMTEC Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| JEMTEC vs. HPQ Silicon Resources | JEMTEC vs. WELL Health Technologies | JEMTEC vs. Major Drilling Group | JEMTEC vs. Orbit Garant Drilling |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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