Correlation Between Citigroup and Compagnie Des
Can any of the company-specific risk be diversified away by investing in both Citigroup and Compagnie Des 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 Compagnie Des into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Compagnie des Eaux, you can compare the effects of market volatilities on Citigroup and Compagnie Des 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 Compagnie Des. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Compagnie Des.
Diversification Opportunities for Citigroup and Compagnie Des
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Compagnie is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Compagnie des Eaux in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie des Eaux 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 Compagnie Des. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie des Eaux has no effect on the direction of Citigroup i.e., Citigroup and Compagnie Des go up and down completely randomly.
Pair Corralation between Citigroup and Compagnie Des
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.51 times more return on investment than Compagnie Des. However, Citigroup is 1.96 times less risky than Compagnie Des. It trades about 0.07 of its potential returns per unit of risk. Compagnie des Eaux is currently generating about -0.09 per unit of risk. If you would invest 6,117 in Citigroup on August 29, 2024 and sell it today you would earn a total of 899.00 from holding Citigroup or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Citigroup vs. Compagnie des Eaux
Performance |
| Timeline |
| Citigroup |
| Compagnie des Eaux |
Citigroup and Compagnie Des Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Compagnie Des
The main advantage of trading using opposite Citigroup and Compagnie Des positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Compagnie Des 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 Compagnie Des will offset losses from the drop in Compagnie Des' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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