Correlation Between Citigroup and Melar Acquisition
Can any of the company-specific risk be diversified away by investing in both Citigroup and Melar Acquisition 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 Melar Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Melar Acquisition Corp, you can compare the effects of market volatilities on Citigroup and Melar Acquisition 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 Melar Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Melar Acquisition.
Diversification Opportunities for Citigroup and Melar Acquisition
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Melar is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Melar Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melar Acquisition Corp 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 Melar Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melar Acquisition Corp has no effect on the direction of Citigroup i.e., Citigroup and Melar Acquisition go up and down completely randomly.
Pair Corralation between Citigroup and Melar Acquisition
Taking into account the 90-day investment horizon Citigroup is expected to generate 16.59 times more return on investment than Melar Acquisition. However, Citigroup is 16.59 times more volatile than Melar Acquisition Corp. It trades about 0.32 of its potential returns per unit of risk. Melar Acquisition Corp is currently generating about 0.12 per unit of risk. If you would invest 6,235 in Citigroup on September 3, 2024 and sell it today you would earn a total of 852.00 from holding Citigroup or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Melar Acquisition Corp
Performance |
| Timeline |
| Citigroup |
| Melar Acquisition Corp |
Citigroup and Melar Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Melar Acquisition
The main advantage of trading using opposite Citigroup and Melar Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Melar Acquisition 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 Melar Acquisition will offset losses from the drop in Melar Acquisition's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Melar Acquisition vs. Alpha One | Melar Acquisition vs. Manaris Corp | Melar Acquisition vs. SCOR PK | Melar Acquisition vs. Aquagold International |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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