Correlation Between Citigroup and Defiance Quantum
Can any of the company-specific risk be diversified away by investing in both Citigroup and Defiance Quantum 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 Defiance Quantum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Defiance Quantum ETF, you can compare the effects of market volatilities on Citigroup and Defiance Quantum 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 Defiance Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Defiance Quantum.
Diversification Opportunities for Citigroup and Defiance Quantum
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Defiance is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Defiance Quantum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Quantum ETF 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 Defiance Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Quantum ETF has no effect on the direction of Citigroup i.e., Citigroup and Defiance Quantum go up and down completely randomly.
Pair Corralation between Citigroup and Defiance Quantum
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.34 times more return on investment than Defiance Quantum. However, Citigroup is 1.34 times more volatile than Defiance Quantum ETF. It trades about 0.23 of its potential returns per unit of risk. Defiance Quantum ETF is currently generating about 0.19 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. Defiance Quantum ETF
Performance |
| Timeline |
| Citigroup |
| Defiance Quantum ETF |
Citigroup and Defiance Quantum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Defiance Quantum
The main advantage of trading using opposite Citigroup and Defiance Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Defiance Quantum 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 Defiance Quantum will offset losses from the drop in Defiance Quantum's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Defiance Quantum vs. Global X Internet | Defiance Quantum vs. Quantum Computing | Defiance Quantum vs. Innovator Loup Frontier |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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