Correlation Between Citigroup and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Citigroup and Stone Ridge 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 Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Stone Ridge 2054, you can compare the effects of market volatilities on Citigroup and Stone Ridge 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 Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Stone Ridge.
Diversification Opportunities for Citigroup and Stone Ridge
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Stone is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Stone Ridge 2054 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge 2054 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 Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge 2054 has no effect on the direction of Citigroup i.e., Citigroup and Stone Ridge go up and down completely randomly.
Pair Corralation between Citigroup and Stone Ridge
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.13 times more return on investment than Stone Ridge. However, Citigroup is 3.13 times more volatile than Stone Ridge 2054. It trades about 0.07 of its potential returns per unit of risk. Stone Ridge 2054 is currently generating about -0.09 per unit of risk. If you would invest 4,684 in Citigroup on November 27, 2024 and sell it today you would earn a total of 3,281 from holding Citigroup or generate 70.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 23.33% |
| Values | Daily Returns |
Citigroup vs. Stone Ridge 2054
Performance |
| Timeline |
| Citigroup |
| Stone Ridge 2054 |
Citigroup and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Stone Ridge
The main advantage of trading using opposite Citigroup and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Stone Ridge 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 Stone Ridge will offset losses from the drop in Stone Ridge's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Stone Ridge vs. Vanguard 0 3 Month | Stone Ridge vs. Global X Funds | Stone Ridge vs. Vanguard Ultra Short Treasury | Stone Ridge vs. US Treasury 12 |
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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