Correlation Between Citigroup and Rogers Communications
Can any of the company-specific risk be diversified away by investing in both Citigroup and Rogers Communications 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 Rogers Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Rogers Communications, you can compare the effects of market volatilities on Citigroup and Rogers Communications 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 Rogers Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Rogers Communications.
Diversification Opportunities for Citigroup and Rogers Communications
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Rogers is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Rogers Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Communications 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 Rogers Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Communications has no effect on the direction of Citigroup i.e., Citigroup and Rogers Communications go up and down completely randomly.
Pair Corralation between Citigroup and Rogers Communications
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.05 times more return on investment than Rogers Communications. However, Citigroup is 1.05 times more volatile than Rogers Communications. It trades about 0.07 of its potential returns per unit of risk. Rogers Communications is currently generating about 0.0 per unit of risk. If you would invest 4,117 in Citigroup on August 28, 2024 and sell it today you would earn a total of 2,958 from holding Citigroup or generate 71.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Citigroup vs. Rogers Communications
Performance |
| Timeline |
| Citigroup |
| Rogers Communications |
Citigroup and Rogers Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Rogers Communications
The main advantage of trading using opposite Citigroup and Rogers Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Rogers Communications 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 Rogers Communications will offset losses from the drop in Rogers Communications' long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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