Correlation Between Citigroup and Pontem Corp
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pontem Corp 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 Pontem Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pontem Corp, you can compare the effects of market volatilities on Citigroup and Pontem Corp 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 Pontem Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pontem Corp.
Diversification Opportunities for Citigroup and Pontem Corp
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Pontem is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pontem Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pontem Corp 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 Pontem Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pontem Corp has no effect on the direction of Citigroup i.e., Citigroup and Pontem Corp go up and down completely randomly.
Pair Corralation between Citigroup and Pontem Corp
If you would invest 6,842 in Citigroup on October 20, 2024 and sell it today you would earn a total of 1,157 from holding Citigroup or generate 16.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Citigroup vs. Pontem Corp
Performance |
| Timeline |
| Citigroup |
| Pontem Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Pontem Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pontem Corp
The main advantage of trading using opposite Citigroup and Pontem Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pontem Corp 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 Pontem Corp will offset losses from the drop in Pontem Corp's long position.| Citigroup vs. Bank of Montreal | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Nova | Citigroup vs. JPMorgan Chase 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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