Correlation Between Citigroup and Summit Global
Can any of the company-specific risk be diversified away by investing in both Citigroup and Summit Global 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 Summit Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Summit Global Investments, you can compare the effects of market volatilities on Citigroup and Summit Global 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 Summit Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Summit Global.
Diversification Opportunities for Citigroup and Summit Global
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Summit is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Summit Global Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Global Investments 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 Summit Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Global Investments has no effect on the direction of Citigroup i.e., Citigroup and Summit Global go up and down completely randomly.
Pair Corralation between Citigroup and Summit Global
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.39 times more return on investment than Summit Global. However, Citigroup is 2.39 times more volatile than Summit Global Investments. It trades about 0.13 of its potential returns per unit of risk. Summit Global Investments is currently generating about 0.13 per unit of risk. If you would invest 3,944 in Citigroup on September 4, 2024 and sell it today you would earn a total of 3,195 from holding Citigroup or generate 81.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Summit Global Investments
Performance |
| Timeline |
| Citigroup |
| Summit Global Investments |
Citigroup and Summit Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Summit Global
The main advantage of trading using opposite Citigroup and Summit Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Summit Global 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 Summit Global will offset losses from the drop in Summit Global's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Summit Global vs. Summit Global Investments | Summit Global vs. Siit Dynamic Asset | Summit Global vs. Aqr Large Cap | Summit Global vs. Aqr Large Cap |
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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