Correlation Between Citigroup and Noble Rock
Can any of the company-specific risk be diversified away by investing in both Citigroup and Noble Rock 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 Noble Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Noble Rock Acquisition, you can compare the effects of market volatilities on Citigroup and Noble Rock 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 Noble Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Noble Rock.
Diversification Opportunities for Citigroup and Noble Rock
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Noble is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Noble Rock Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Rock Acquisition 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 Noble Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Rock Acquisition has no effect on the direction of Citigroup i.e., Citigroup and Noble Rock go up and down completely randomly.
Pair Corralation between Citigroup and Noble Rock
If you would invest 6,412 in Citigroup on August 30, 2024 and sell it today you would earn a total of 604.00 from holding Citigroup or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Citigroup vs. Noble Rock Acquisition
Performance |
| Timeline |
| Citigroup |
| Noble Rock Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Noble Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Noble Rock
The main advantage of trading using opposite Citigroup and Noble Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Noble Rock 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 Noble Rock will offset losses from the drop in Noble Rock's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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