Correlation Between Citigroup and Kits Eyecare
Can any of the company-specific risk be diversified away by investing in both Citigroup and Kits Eyecare 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 Kits Eyecare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Kits Eyecare, you can compare the effects of market volatilities on Citigroup and Kits Eyecare 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 Kits Eyecare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Kits Eyecare.
Diversification Opportunities for Citigroup and Kits Eyecare
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Kits is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Kits Eyecare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kits Eyecare 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 Kits Eyecare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kits Eyecare has no effect on the direction of Citigroup i.e., Citigroup and Kits Eyecare go up and down completely randomly.
Pair Corralation between Citigroup and Kits Eyecare
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.25 times more return on investment than Kits Eyecare. However, Citigroup is 1.25 times more volatile than Kits Eyecare. It trades about 0.21 of its potential returns per unit of risk. Kits Eyecare is currently generating about -0.3 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 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Kits Eyecare
Performance |
| Timeline |
| Citigroup |
| Kits Eyecare |
Citigroup and Kits Eyecare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Kits Eyecare
The main advantage of trading using opposite Citigroup and Kits Eyecare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Kits Eyecare 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 Kits Eyecare will offset losses from the drop in Kits Eyecare's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Kits Eyecare vs. Data Communications Management | Kits Eyecare vs. Haivision Systems | Kits Eyecare vs. Thinkific Labs |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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