Correlation Between Citigroup and NextCell Pharma
Can any of the company-specific risk be diversified away by investing in both Citigroup and NextCell Pharma 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 NextCell Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and NextCell Pharma AB, you can compare the effects of market volatilities on Citigroup and NextCell Pharma 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 NextCell Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and NextCell Pharma.
Diversification Opportunities for Citigroup and NextCell Pharma
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Citigroup and NextCell is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and NextCell Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCell Pharma AB 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 NextCell Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextCell Pharma AB has no effect on the direction of Citigroup i.e., Citigroup and NextCell Pharma go up and down completely randomly.
Pair Corralation between Citigroup and NextCell Pharma
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.17 times more return on investment than NextCell Pharma. However, Citigroup is 1.17 times more volatile than NextCell Pharma AB. It trades about 0.26 of its potential returns per unit of risk. NextCell Pharma AB is currently generating about 0.04 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Citigroup vs. NextCell Pharma AB
Performance |
| Timeline |
| Citigroup |
| NextCell Pharma AB |
Citigroup and NextCell Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and NextCell Pharma
The main advantage of trading using opposite Citigroup and NextCell Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, NextCell Pharma 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 NextCell Pharma will offset losses from the drop in NextCell Pharma's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| NextCell Pharma vs. Diamyd Medical AB | NextCell Pharma vs. Mendus AB | NextCell Pharma vs. Vicore Pharma Holding | NextCell Pharma vs. Immunovia publ AB |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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