Correlation Between Citigroup and STRAX AB
Can any of the company-specific risk be diversified away by investing in both Citigroup and STRAX AB 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 STRAX AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and STRAX AB SK, you can compare the effects of market volatilities on Citigroup and STRAX AB 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 STRAX AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and STRAX AB.
Diversification Opportunities for Citigroup and STRAX AB
Pay attention - limited upside
The 3 months correlation between Citigroup and STRAX is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and STRAX AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAX AB SK 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 STRAX AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAX AB SK has no effect on the direction of Citigroup i.e., Citigroup and STRAX AB go up and down completely randomly.
Pair Corralation between Citigroup and STRAX AB
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.1 times more return on investment than STRAX AB. However, Citigroup is 10.18 times less risky than STRAX AB. It trades about 0.24 of its potential returns per unit of risk. STRAX AB SK is currently generating about 0.0 per unit of risk. If you would invest 6,895 in Citigroup on October 22, 2024 and sell it today you would earn a total of 1,104 from holding Citigroup or generate 16.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Citigroup vs. STRAX AB SK
Performance |
| Timeline |
| Citigroup |
| STRAX AB SK |
Citigroup and STRAX AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and STRAX AB
The main advantage of trading using opposite Citigroup and STRAX AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, STRAX AB 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 STRAX AB will offset losses from the drop in STRAX AB's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| STRAX AB vs. MINCO SILVER | STRAX AB vs. MCEWEN MINING INC | STRAX AB vs. De Grey Mining | STRAX AB vs. Japan Tobacco |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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