Correlation Between Citigroup and Pollard Banknote
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pollard Banknote 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 Pollard Banknote into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pollard Banknote Limited, you can compare the effects of market volatilities on Citigroup and Pollard Banknote 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 Pollard Banknote. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pollard Banknote.
Diversification Opportunities for Citigroup and Pollard Banknote
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Pollard is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pollard Banknote Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pollard Banknote 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 Pollard Banknote. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pollard Banknote has no effect on the direction of Citigroup i.e., Citigroup and Pollard Banknote go up and down completely randomly.
Pair Corralation between Citigroup and Pollard Banknote
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.79 times more return on investment than Pollard Banknote. However, Citigroup is 1.27 times less risky than Pollard Banknote. It trades about 0.12 of its potential returns per unit of risk. Pollard Banknote Limited is currently generating about 0.02 per unit of risk. If you would invest 6,092 in Citigroup on August 31, 2024 and sell it today you would earn a total of 924.00 from holding Citigroup or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Citigroup vs. Pollard Banknote Limited
Performance |
| Timeline |
| Citigroup |
| Pollard Banknote |
Citigroup and Pollard Banknote Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pollard Banknote
The main advantage of trading using opposite Citigroup and Pollard Banknote positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pollard Banknote 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 Pollard Banknote will offset losses from the drop in Pollard Banknote's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Pollard Banknote vs. Berkshire Hathaway CDR | Pollard Banknote vs. JPMorgan Chase Co | Pollard Banknote vs. Bank of America | Pollard Banknote vs. Alphabet Inc CDR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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