Correlation Between Citigroup and Signify NV
Can any of the company-specific risk be diversified away by investing in both Citigroup and Signify NV 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 Signify NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Signify NV, you can compare the effects of market volatilities on Citigroup and Signify NV 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 Signify NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Signify NV.
Diversification Opportunities for Citigroup and Signify NV
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Signify is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Signify NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signify NV 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 Signify NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signify NV has no effect on the direction of Citigroup i.e., Citigroup and Signify NV go up and down completely randomly.
Pair Corralation between Citigroup and Signify NV
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.84 times more return on investment than Signify NV. However, Citigroup is 1.19 times less risky than Signify NV. It trades about 0.14 of its potential returns per unit of risk. Signify NV is currently generating about 0.02 per unit of risk. If you would invest 6,203 in Citigroup on August 24, 2024 and sell it today you would earn a total of 781.00 from holding Citigroup or generate 12.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Signify NV
Performance |
| Timeline |
| Citigroup |
| Signify NV |
Citigroup and Signify NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Signify NV
The main advantage of trading using opposite Citigroup and Signify NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Signify NV 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 Signify NV will offset losses from the drop in Signify NV's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Signify NV vs. Tantalus Systems Holding | Signify NV vs. AFC Energy plc | Signify NV vs. Loop Energy | Signify NV vs. CBAK Energy Technology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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