Correlation Between Citigroup and NEX POINT
Can any of the company-specific risk be diversified away by investing in both Citigroup and NEX POINT 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 NEX POINT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and NEX POINT, you can compare the effects of market volatilities on Citigroup and NEX POINT 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 NEX POINT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NEX POINT.
Diversification Opportunities for Citigroup and NEX POINT
Good diversification
The 3 months correlation between Citigroup and NEX is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NEX POINT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEX POINT 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 NEX POINT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEX POINT has no effect on the direction of Citigroup i.e., Citigroup and NEX POINT go up and down completely randomly.
Pair Corralation between Citigroup and NEX POINT
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.3 times less return on investment than NEX POINT. But when comparing it to its historical volatility, Citigroup is 10.11 times less risky than NEX POINT. It trades about 0.08 of its potential returns per unit of risk. NEX POINT is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 234.00 in NEX POINT on September 14, 2024 and sell it today you would lose (161.00) from holding NEX POINT or give up 68.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.97% |
| Values | Daily Returns |
Citigroup vs. NEX POINT
Performance |
| Timeline |
| Citigroup |
| NEX POINT |
Citigroup and NEX POINT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and NEX POINT
The main advantage of trading using opposite Citigroup and NEX POINT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, NEX POINT 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 NEX POINT will offset losses from the drop in NEX POINT's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| NEX POINT vs. PINTHONG INDUSTRIAL PARK | NEX POINT vs. Thai Coating Industrial | NEX POINT vs. K W Metal | NEX POINT vs. CPR Gomu Industrial |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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