Correlation Between Citigroup and Pilgrims Pride
Can any of the company-specific risk be diversified away by investing in both Citigroup and Pilgrims Pride 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 Pilgrims Pride into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Pilgrims Pride Corp, you can compare the effects of market volatilities on Citigroup and Pilgrims Pride 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 Pilgrims Pride. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Pilgrims Pride.
Diversification Opportunities for Citigroup and Pilgrims Pride
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Pilgrims is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Pilgrims Pride Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pilgrims Pride 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 Pilgrims Pride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pilgrims Pride Corp has no effect on the direction of Citigroup i.e., Citigroup and Pilgrims Pride go up and down completely randomly.
Pair Corralation between Citigroup and Pilgrims Pride
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.01 times more return on investment than Pilgrims Pride. However, Citigroup is 1.01 times more volatile than Pilgrims Pride Corp. It trades about 0.23 of its potential returns per unit of risk. Pilgrims Pride Corp is currently generating about 0.21 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 624.00 from holding Citigroup or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Pilgrims Pride Corp
Performance |
| Timeline |
| Citigroup |
| Pilgrims Pride Corp |
Citigroup and Pilgrims Pride Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Pilgrims Pride
The main advantage of trading using opposite Citigroup and Pilgrims Pride positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Pilgrims Pride 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 Pilgrims Pride will offset losses from the drop in Pilgrims Pride's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Pilgrims Pride vs. Bellring Brands LLC | Pilgrims Pride vs. Treehouse Foods | Pilgrims Pride vs. Ingredion Incorporated | Pilgrims Pride vs. JM Smucker |
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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