Correlation Between Citigroup and T REX
Can any of the company-specific risk be diversified away by investing in both Citigroup and T REX 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 T REX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and T REX 2X Inverse, you can compare the effects of market volatilities on Citigroup and T REX 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 T REX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and T REX.
Diversification Opportunities for Citigroup and T REX
Very good diversification
The 3 months correlation between Citigroup and MSTZ is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and T REX 2X Inverse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T REX 2X 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 T REX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T REX 2X has no effect on the direction of Citigroup i.e., Citigroup and T REX go up and down completely randomly.
Pair Corralation between Citigroup and T REX
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.11 times more return on investment than T REX. However, Citigroup is 9.04 times less risky than T REX. It trades about 0.21 of its potential returns per unit of risk. T REX 2X Inverse is currently generating about -0.2 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. T REX 2X Inverse
Performance |
| Timeline |
| Citigroup |
| T REX 2X |
Citigroup and T REX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and T REX
The main advantage of trading using opposite Citigroup and T REX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, T REX 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 T REX will offset losses from the drop in T REX's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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