Correlation Between Citigroup and MIND CTI
Can any of the company-specific risk be diversified away by investing in both Citigroup and MIND CTI 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 MIND CTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and MIND CTI, you can compare the effects of market volatilities on Citigroup and MIND CTI 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 MIND CTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and MIND CTI.
Diversification Opportunities for Citigroup and MIND CTI
Weak diversification
The 3 months correlation between Citigroup and MIND is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and MIND CTI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIND CTI 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 MIND CTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIND CTI has no effect on the direction of Citigroup i.e., Citigroup and MIND CTI go up and down completely randomly.
Pair Corralation between Citigroup and MIND CTI
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.69 times more return on investment than MIND CTI. However, Citigroup is 1.69 times more volatile than MIND CTI. It trades about 0.07 of its potential returns per unit of risk. MIND CTI is currently generating about 0.05 per unit of risk. If you would invest 6,080 in Citigroup on August 28, 2024 and sell it today you would earn a total of 995.00 from holding Citigroup or generate 16.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Citigroup vs. MIND CTI
Performance |
| Timeline |
| Citigroup |
| MIND CTI |
Citigroup and MIND CTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and MIND CTI
The main advantage of trading using opposite Citigroup and MIND CTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, MIND CTI 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 MIND CTI will offset losses from the drop in MIND CTI's long position.The idea behind Citigroup and MIND CTI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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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