Correlation Between Citigroup and NESTLE NIGERIA
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By analyzing existing cross correlation between Citigroup and NESTLE NIGERIA PLC, you can compare the effects of market volatilities on Citigroup and NESTLE NIGERIA 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 NESTLE NIGERIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NESTLE NIGERIA.
Diversification Opportunities for Citigroup and NESTLE NIGERIA
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and NESTLE is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NESTLE NIGERIA PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESTLE NIGERIA PLC 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 NESTLE NIGERIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESTLE NIGERIA PLC has no effect on the direction of Citigroup i.e., Citigroup and NESTLE NIGERIA go up and down completely randomly.
Pair Corralation between Citigroup and NESTLE NIGERIA
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.72 times more return on investment than NESTLE NIGERIA. However, Citigroup is 2.72 times more volatile than NESTLE NIGERIA PLC. It trades about 0.22 of its potential returns per unit of risk. NESTLE NIGERIA PLC is currently generating about -0.1 per unit of risk. If you would invest 6,129 in Citigroup on September 19, 2024 and sell it today you would earn a total of 983.00 from holding Citigroup or generate 16.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Citigroup vs. NESTLE NIGERIA PLC
Performance |
| Timeline |
| Citigroup |
| NESTLE NIGERIA PLC |
Citigroup and NESTLE NIGERIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and NESTLE NIGERIA
The main advantage of trading using opposite Citigroup and NESTLE NIGERIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, NESTLE NIGERIA 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 NESTLE NIGERIA will offset losses from the drop in NESTLE NIGERIA's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| NESTLE NIGERIA vs. MULTIVERSE MINING AND | NESTLE NIGERIA vs. VETIVA INDUSTRIAL ETF | NESTLE NIGERIA vs. INDUSTRIAL MEDICAL GASES | NESTLE NIGERIA vs. SECURE ELECTRONIC TECHNOLOGY |
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