Correlation Between Citigroup and Prime Office
Can any of the company-specific risk be diversified away by investing in both Citigroup and Prime Office 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 Prime Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Prime Office AS, you can compare the effects of market volatilities on Citigroup and Prime Office 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 Prime Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Prime Office.
Diversification Opportunities for Citigroup and Prime Office
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Prime is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Prime Office AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Office AS 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 Prime Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Office AS has no effect on the direction of Citigroup i.e., Citigroup and Prime Office go up and down completely randomly.
Pair Corralation between Citigroup and Prime Office
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.05 times more return on investment than Prime Office. However, Citigroup is 1.05 times more volatile than Prime Office AS. It trades about 0.24 of its potential returns per unit of risk. Prime Office AS is currently generating about -0.06 per unit of risk. If you would invest 6,245 in Citigroup on August 25, 2024 and sell it today you would earn a total of 739.00 from holding Citigroup or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Prime Office AS
Performance |
| Timeline |
| Citigroup |
| Prime Office AS |
Citigroup and Prime Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Prime Office
The main advantage of trading using opposite Citigroup and Prime Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Prime Office 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 Prime Office will offset losses from the drop in Prime Office's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Prime Office vs. BioPorto | Prime Office vs. Newcap Holding AS | Prime Office vs. Agat Ejendomme AS | Prime Office vs. PF Atlantic Petroleum |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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