Correlation Between Citigroup and Reckitt Benckiser
Can any of the company-specific risk be diversified away by investing in both Citigroup and Reckitt Benckiser 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 Reckitt Benckiser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Reckitt Benckiser Group, you can compare the effects of market volatilities on Citigroup and Reckitt Benckiser 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 Reckitt Benckiser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Reckitt Benckiser.
Diversification Opportunities for Citigroup and Reckitt Benckiser
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Reckitt is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Reckitt Benckiser Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reckitt Benckiser 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 Reckitt Benckiser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reckitt Benckiser has no effect on the direction of Citigroup i.e., Citigroup and Reckitt Benckiser go up and down completely randomly.
Pair Corralation between Citigroup and Reckitt Benckiser
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.64 times more return on investment than Reckitt Benckiser. However, Citigroup is 1.56 times less risky than Reckitt Benckiser. It trades about 0.25 of its potential returns per unit of risk. Reckitt Benckiser Group is currently generating about -0.03 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Reckitt Benckiser Group
Performance |
| Timeline |
| Citigroup |
| Reckitt Benckiser |
Citigroup and Reckitt Benckiser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Reckitt Benckiser
The main advantage of trading using opposite Citigroup and Reckitt Benckiser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Reckitt Benckiser 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 Reckitt Benckiser will offset losses from the drop in Reckitt Benckiser's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Reckitt Benckiser vs. Church Dwight | Reckitt Benckiser vs. Kimberly Clark de Mexico | Reckitt Benckiser vs. LOreal Co ADR | Reckitt Benckiser vs. Shiseido Company |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |