Correlation Between Citigroup and Network CN
Can any of the company-specific risk be diversified away by investing in both Citigroup and Network CN 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 Network CN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Network CN, you can compare the effects of market volatilities on Citigroup and Network CN 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 Network CN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Network CN.
Diversification Opportunities for Citigroup and Network CN
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Network is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Network CN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network CN 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 Network CN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network CN has no effect on the direction of Citigroup i.e., Citigroup and Network CN go up and down completely randomly.
Pair Corralation between Citigroup and Network CN
Taking into account the 90-day investment horizon Citigroup is expected to generate 116.11 times less return on investment than Network CN. But when comparing it to its historical volatility, Citigroup is 108.18 times less risky than Network CN. It trades about 0.26 of its potential returns per unit of risk. Network CN is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 108.00 in Network CN on September 1, 2024 and sell it today you would lose (43.00) from holding Network CN or give up 39.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Network CN
Performance |
| Timeline |
| Citigroup |
| Network CN |
Citigroup and Network CN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Network CN
The main advantage of trading using opposite Citigroup and Network CN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Network CN 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 Network CN will offset losses from the drop in Network CN's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Network CN vs. Mesa Air Group | Network CN vs. The9 Ltd ADR | Network CN vs. Boyd Gaming | Network CN vs. Norfolk Southern |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |