Correlation Between Citigroup and Readly International
Can any of the company-specific risk be diversified away by investing in both Citigroup and Readly International 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 Readly International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Readly International AB, you can compare the effects of market volatilities on Citigroup and Readly International 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 Readly International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Readly International.
Diversification Opportunities for Citigroup and Readly International
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Readly is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Readly International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Readly International 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 Readly International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Readly International has no effect on the direction of Citigroup i.e., Citigroup and Readly International go up and down completely randomly.
Pair Corralation between Citigroup and Readly International
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.75 times more return on investment than Readly International. However, Citigroup is 1.33 times less risky than Readly International. It trades about 0.08 of its potential returns per unit of risk. Readly International AB is currently generating about 0.04 per unit of risk. If you would invest 4,054 in Citigroup on September 12, 2024 and sell it today you would earn a total of 3,196 from holding Citigroup or generate 78.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Citigroup vs. Readly International AB
Performance |
| Timeline |
| Citigroup |
| Readly International |
Citigroup and Readly International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Readly International
The main advantage of trading using opposite Citigroup and Readly International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Readly International 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 Readly International will offset losses from the drop in Readly International's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Readly International vs. Storytel AB | Readly International vs. Stillfront Group AB | Readly International vs. Millicom International Cellular | Readly International vs. Boozt AB |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |