Correlation Between Citigroup and Natixis Sustainable
Can any of the company-specific risk be diversified away by investing in both Citigroup and Natixis Sustainable 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 Natixis Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Natixis Sustainable Future, you can compare the effects of market volatilities on Citigroup and Natixis Sustainable 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 Natixis Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Natixis Sustainable.
Diversification Opportunities for Citigroup and Natixis Sustainable
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Natixis is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Natixis Sustainable Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Sustainable 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 Natixis Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natixis Sustainable has no effect on the direction of Citigroup i.e., Citigroup and Natixis Sustainable go up and down completely randomly.
Pair Corralation between Citigroup and Natixis Sustainable
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.06 times more return on investment than Natixis Sustainable. However, Citigroup is 2.06 times more volatile than Natixis Sustainable Future. It trades about 0.07 of its potential returns per unit of risk. Natixis Sustainable Future is currently generating about 0.09 per unit of risk. If you would invest 4,293 in Citigroup on September 3, 2024 and sell it today you would earn a total of 2,794 from holding Citigroup or generate 65.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Natixis Sustainable Future
Performance |
| Timeline |
| Citigroup |
| Natixis Sustainable |
Citigroup and Natixis Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Natixis Sustainable
The main advantage of trading using opposite Citigroup and Natixis Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Natixis Sustainable 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 Natixis Sustainable will offset losses from the drop in Natixis Sustainable's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Natixis Sustainable vs. Vanguard Target Retirement | Natixis Sustainable vs. American Funds 2065 | Natixis Sustainable vs. American Funds 2065 | Natixis Sustainable vs. American Funds 2065 |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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