Correlation Between Citigroup and BANDAI NAMCO
Can any of the company-specific risk be diversified away by investing in both Citigroup and BANDAI NAMCO 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 BANDAI NAMCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and BANDAI NAMCO Holdings, you can compare the effects of market volatilities on Citigroup and BANDAI NAMCO 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 BANDAI NAMCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and BANDAI NAMCO.
Diversification Opportunities for Citigroup and BANDAI NAMCO
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and BANDAI is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and BANDAI NAMCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANDAI NAMCO Holdings 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 BANDAI NAMCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANDAI NAMCO Holdings has no effect on the direction of Citigroup i.e., Citigroup and BANDAI NAMCO go up and down completely randomly.
Pair Corralation between Citigroup and BANDAI NAMCO
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.92 times more return on investment than BANDAI NAMCO. However, Citigroup is 1.09 times less risky than BANDAI NAMCO. It trades about 0.25 of its potential returns per unit of risk. BANDAI NAMCO Holdings is currently generating about 0.14 per unit of risk. If you would invest 6,315 in Citigroup on November 1, 2024 and sell it today you would earn a total of 1,871 from holding Citigroup or generate 29.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
Citigroup vs. BANDAI NAMCO Holdings
Performance |
| Timeline |
| Citigroup |
| BANDAI NAMCO Holdings |
Citigroup and BANDAI NAMCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and BANDAI NAMCO
The main advantage of trading using opposite Citigroup and BANDAI NAMCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, BANDAI NAMCO 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 BANDAI NAMCO will offset losses from the drop in BANDAI NAMCO's long position.| Citigroup vs. Royal Bank of | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Canadian Imperial Bank |
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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 Stocks Directory module to find actively traded stocks across global markets.
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