Correlation Between Citigroup and Myers Industries
Can any of the company-specific risk be diversified away by investing in both Citigroup and Myers Industries 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 Myers Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Myers Industries, you can compare the effects of market volatilities on Citigroup and Myers Industries 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 Myers Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Myers Industries.
Diversification Opportunities for Citigroup and Myers Industries
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Myers is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Myers Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myers Industries 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 Myers Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myers Industries has no effect on the direction of Citigroup i.e., Citigroup and Myers Industries go up and down completely randomly.
Pair Corralation between Citigroup and Myers Industries
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.69 times more return on investment than Myers Industries. However, Citigroup is 1.45 times less risky than Myers Industries. It trades about 0.21 of its potential returns per unit of risk. Myers Industries is currently generating about -0.06 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Myers Industries
Performance |
| Timeline |
| Citigroup |
| Myers Industries |
Citigroup and Myers Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Myers Industries
The main advantage of trading using opposite Citigroup and Myers Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Myers Industries 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 Myers Industries will offset losses from the drop in Myers Industries' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Myers Industries vs. Greif Bros | Myers Industries vs. Reynolds Consumer Products | Myers Industries vs. Silgan Holdings | Myers Industries vs. O I Glass |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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