Correlation Between Citigroup and QUALCOMM Incorporated
Can any of the company-specific risk be diversified away by investing in both Citigroup and QUALCOMM Incorporated 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 QUALCOMM Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and QUALCOMM Incorporated, you can compare the effects of market volatilities on Citigroup and QUALCOMM Incorporated 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 QUALCOMM Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and QUALCOMM Incorporated.
Diversification Opportunities for Citigroup and QUALCOMM Incorporated
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citigroup and QUALCOMM is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and QUALCOMM Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUALCOMM Incorporated 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 QUALCOMM Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUALCOMM Incorporated has no effect on the direction of Citigroup i.e., Citigroup and QUALCOMM Incorporated go up and down completely randomly.
Pair Corralation between Citigroup and QUALCOMM Incorporated
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.92 times more return on investment than QUALCOMM Incorporated. However, Citigroup is 1.08 times less risky than QUALCOMM Incorporated. It trades about 0.24 of its potential returns per unit of risk. QUALCOMM Incorporated 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. QUALCOMM Incorporated
Performance |
| Timeline |
| Citigroup |
| QUALCOMM Incorporated |
Citigroup and QUALCOMM Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and QUALCOMM Incorporated
The main advantage of trading using opposite Citigroup and QUALCOMM Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, QUALCOMM Incorporated 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 QUALCOMM Incorporated will offset losses from the drop in QUALCOMM Incorporated's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| QUALCOMM Incorporated vs. TOREX SEMICONDUCTOR LTD | QUALCOMM Incorporated vs. HomeToGo SE | QUALCOMM Incorporated vs. Haier Smart Home | QUALCOMM Incorporated vs. Nordic Semiconductor ASA |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |