Correlation Between Citigroup and Plaza Centers
Can any of the company-specific risk be diversified away by investing in both Citigroup and Plaza Centers 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 Plaza Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Plaza Centers NV, you can compare the effects of market volatilities on Citigroup and Plaza Centers 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 Plaza Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Plaza Centers.
Diversification Opportunities for Citigroup and Plaza Centers
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Plaza is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Plaza Centers NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Centers 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 Plaza Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Centers NV has no effect on the direction of Citigroup i.e., Citigroup and Plaza Centers go up and down completely randomly.
Pair Corralation between Citigroup and Plaza Centers
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.67 times more return on investment than Plaza Centers. However, Citigroup is 1.5 times less risky than Plaza Centers. It trades about 0.09 of its potential returns per unit of risk. Plaza Centers NV is currently generating about -0.12 per unit of risk. If you would invest 5,476 in Citigroup on September 1, 2024 and sell it today you would earn a total of 1,611 from holding Citigroup or generate 29.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Citigroup vs. Plaza Centers NV
Performance |
| Timeline |
| Citigroup |
| Plaza Centers NV |
Citigroup and Plaza Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Plaza Centers
The main advantage of trading using opposite Citigroup and Plaza Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Plaza Centers 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 Plaza Centers will offset losses from the drop in Plaza Centers' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Plaza Centers vs. Impax Environmental Markets | Plaza Centers vs. Naked Wines plc | Plaza Centers vs. Beeks Trading | Plaza Centers vs. Lowland Investment Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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