Correlation Between Citigroup and NAIROBI BUSINESS
Can any of the company-specific risk be diversified away by investing in both Citigroup and NAIROBI BUSINESS 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 NAIROBI BUSINESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and NAIROBI BUSINESS VENTURES, you can compare the effects of market volatilities on Citigroup and NAIROBI BUSINESS 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 NAIROBI BUSINESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NAIROBI BUSINESS.
Diversification Opportunities for Citigroup and NAIROBI BUSINESS
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citigroup and NAIROBI is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NAIROBI BUSINESS VENTURES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAIROBI BUSINESS VENTURES 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 NAIROBI BUSINESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAIROBI BUSINESS VENTURES has no effect on the direction of Citigroup i.e., Citigroup and NAIROBI BUSINESS go up and down completely randomly.
Pair Corralation between Citigroup and NAIROBI BUSINESS
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.69 times more return on investment than NAIROBI BUSINESS. However, Citigroup is 1.44 times less risky than NAIROBI BUSINESS. It trades about 0.41 of its potential returns per unit of risk. NAIROBI BUSINESS VENTURES is currently generating about 0.05 per unit of risk. If you would invest 6,994 in Citigroup on November 3, 2024 and sell it today you would earn a total of 1,149 from holding Citigroup or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Citigroup vs. NAIROBI BUSINESS VENTURES
Performance |
| Timeline |
| Citigroup |
| NAIROBI BUSINESS VENTURES |
Citigroup and NAIROBI BUSINESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and NAIROBI BUSINESS
The main advantage of trading using opposite Citigroup and NAIROBI BUSINESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, NAIROBI BUSINESS 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 NAIROBI BUSINESS will offset losses from the drop in NAIROBI BUSINESS's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| NAIROBI BUSINESS vs. UCHUMI SUPERMARKET PLC | NAIROBI BUSINESS vs. HOMEBOYZ ENTERTAINMENT PLC | NAIROBI BUSINESS vs. CO OPERATIVE BANK OF | NAIROBI BUSINESS vs. KENYA RE INSURANCE PORATION |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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