Correlation Between Citigroup and Pointsbet Holdings
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pointsbet Holdings 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 Pointsbet Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pointsbet Holdings, you can compare the effects of market volatilities on Citigroup and Pointsbet Holdings 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 Pointsbet Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pointsbet Holdings.
Diversification Opportunities for Citigroup and Pointsbet Holdings
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Pointsbet is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pointsbet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pointsbet Holdings 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 Pointsbet Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pointsbet Holdings has no effect on the direction of Citigroup i.e., Citigroup and Pointsbet Holdings go up and down completely randomly.
Pair Corralation between Citigroup and Pointsbet Holdings
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.44 times less return on investment than Pointsbet Holdings. But when comparing it to its historical volatility, Citigroup is 1.79 times less risky than Pointsbet Holdings. It trades about 0.23 of its potential returns per unit of risk. Pointsbet Holdings is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 73.00 in Pointsbet Holdings on August 31, 2024 and sell it today you would earn a total of 31.00 from holding Pointsbet Holdings or generate 42.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Pointsbet Holdings
Performance |
| Timeline |
| Citigroup |
| Pointsbet Holdings |
Citigroup and Pointsbet Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pointsbet Holdings
The main advantage of trading using opposite Citigroup and Pointsbet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pointsbet Holdings 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 Pointsbet Holdings will offset losses from the drop in Pointsbet Holdings' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Pointsbet Holdings vs. Sonic Healthcare | Pointsbet Holdings vs. Autosports Group | Pointsbet Holdings vs. Aspire Mining | Pointsbet Holdings vs. Oceania Healthcare |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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