Correlation Between Citigroup and Kamino
Can any of the company-specific risk be diversified away by investing in both Citigroup and Kamino 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 Kamino into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Kamino, you can compare the effects of market volatilities on Citigroup and Kamino 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 Kamino. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Kamino.
Diversification Opportunities for Citigroup and Kamino
Poor diversification
The 3 months correlation between Citigroup and Kamino is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Kamino in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamino 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 Kamino. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamino has no effect on the direction of Citigroup i.e., Citigroup and Kamino go up and down completely randomly.
Pair Corralation between Citigroup and Kamino
Taking into account the 90-day investment horizon Citigroup is expected to generate 35.23 times less return on investment than Kamino. But when comparing it to its historical volatility, Citigroup is 38.3 times less risky than Kamino. It trades about 0.07 of its potential returns per unit of risk. Kamino is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Kamino on August 24, 2024 and sell it today you would earn a total of 13.00 from holding Kamino or generate 9.223372036854776E16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 96.49% |
Values | Daily Returns |
Citigroup vs. Kamino
Performance |
Timeline |
Citigroup |
Kamino |
Citigroup and Kamino Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citigroup and Kamino
The main advantage of trading using opposite Citigroup and Kamino positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Kamino 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 Kamino will offset losses from the drop in Kamino's long position.Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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