Correlation Between Citigroup and Rani Therapeutics
Can any of the company-specific risk be diversified away by investing in both Citigroup and Rani Therapeutics 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 Rani Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Rani Therapeutics Holdings, you can compare the effects of market volatilities on Citigroup and Rani Therapeutics 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 Rani Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Rani Therapeutics.
Diversification Opportunities for Citigroup and Rani Therapeutics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Rani is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Rani Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rani Therapeutics 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 Rani Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rani Therapeutics has no effect on the direction of Citigroup i.e., Citigroup and Rani Therapeutics go up and down completely randomly.
Pair Corralation between Citigroup and Rani Therapeutics
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.25 times more return on investment than Rani Therapeutics. However, Citigroup is 4.08 times less risky than Rani Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Rani Therapeutics Holdings is currently generating about -0.05 per unit of risk. If you would invest 6,079 in Citigroup on August 30, 2024 and sell it today you would earn a total of 937.00 from holding Citigroup or generate 15.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Rani Therapeutics Holdings
Performance |
| Timeline |
| Citigroup |
| Rani Therapeutics |
Citigroup and Rani Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Rani Therapeutics
The main advantage of trading using opposite Citigroup and Rani Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Rani Therapeutics 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 Rani Therapeutics will offset losses from the drop in Rani Therapeutics' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Rani Therapeutics vs. Ikena Oncology | Rani Therapeutics vs. Eliem Therapeutics | Rani Therapeutics vs. HCW Biologics | Rani Therapeutics vs. Tempest Therapeutics |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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