Correlation Between Citigroup and METAIR INVTS
Can any of the company-specific risk be diversified away by investing in both Citigroup and METAIR INVTS 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 METAIR INVTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and METAIR INVTS LTD, you can compare the effects of market volatilities on Citigroup and METAIR INVTS 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 METAIR INVTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and METAIR INVTS.
Diversification Opportunities for Citigroup and METAIR INVTS
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and METAIR is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and METAIR INVTS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METAIR INVTS LTD 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 METAIR INVTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METAIR INVTS LTD has no effect on the direction of Citigroup i.e., Citigroup and METAIR INVTS go up and down completely randomly.
Pair Corralation between Citigroup and METAIR INVTS
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.37 times more return on investment than METAIR INVTS. However, Citigroup is 2.69 times less risky than METAIR INVTS. It trades about 0.06 of its potential returns per unit of risk. METAIR INVTS LTD is currently generating about -0.03 per unit of risk. If you would invest 4,783 in Citigroup on October 16, 2024 and sell it today you would earn a total of 2,567 from holding Citigroup or generate 53.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Citigroup vs. METAIR INVTS LTD
Performance |
| Timeline |
| Citigroup |
| METAIR INVTS LTD |
Citigroup and METAIR INVTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and METAIR INVTS
The main advantage of trading using opposite Citigroup and METAIR INVTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, METAIR INVTS 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 METAIR INVTS will offset losses from the drop in METAIR INVTS's long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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