Correlation Between Citigroup and New Work
Can any of the company-specific risk be diversified away by investing in both Citigroup and New Work 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 New Work into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and New Work SE, you can compare the effects of market volatilities on Citigroup and New Work 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 New Work. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and New Work.
Diversification Opportunities for Citigroup and New Work
Poor diversification
The 3 months correlation between Citigroup and New is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and New Work SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Work SE 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 New Work. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Work SE has no effect on the direction of Citigroup i.e., Citigroup and New Work go up and down completely randomly.
Pair Corralation between Citigroup and New Work
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.6 times more return on investment than New Work. However, Citigroup is 1.66 times less risky than New Work. It trades about 0.14 of its potential returns per unit of risk. New Work SE is currently generating about 0.02 per unit of risk. If you would invest 3,675 in Citigroup on September 19, 2024 and sell it today you would earn a total of 3,137 from holding Citigroup or generate 85.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.31% |
| Values | Daily Returns |
Citigroup vs. New Work SE
Performance |
| Timeline |
| Citigroup |
| New Work SE |
Citigroup and New Work Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and New Work
The main advantage of trading using opposite Citigroup and New Work positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, New Work 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 New Work will offset losses from the drop in New Work's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| New Work vs. CarsalesCom | New Work vs. ALERION CLEANPOWER | New Work vs. CVW CLEANTECH INC | New Work vs. CANON MARKETING JP |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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