Correlation Between Citigroup and Rejlers AB
Can any of the company-specific risk be diversified away by investing in both Citigroup and Rejlers AB 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 Rejlers AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Rejlers AB, you can compare the effects of market volatilities on Citigroup and Rejlers AB 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 Rejlers AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Rejlers AB.
Diversification Opportunities for Citigroup and Rejlers AB
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Rejlers is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Rejlers AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rejlers AB 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 Rejlers AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rejlers AB has no effect on the direction of Citigroup i.e., Citigroup and Rejlers AB go up and down completely randomly.
Pair Corralation between Citigroup and Rejlers AB
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.1 times more return on investment than Rejlers AB. However, Citigroup is 2.1 times more volatile than Rejlers AB. It trades about 0.29 of its potential returns per unit of risk. Rejlers AB is currently generating about -0.21 per unit of risk. If you would invest 6,122 in Citigroup on August 26, 2024 and sell it today you would earn a total of 862.00 from holding Citigroup or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Rejlers AB
Performance |
| Timeline |
| Citigroup |
| Rejlers AB |
Citigroup and Rejlers AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Rejlers AB
The main advantage of trading using opposite Citigroup and Rejlers AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Rejlers AB 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 Rejlers AB will offset losses from the drop in Rejlers AB's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Rejlers AB vs. MAG Interactive AB | Rejlers AB vs. Kambi Group PLC | Rejlers AB vs. Hexatronic Group AB | Rejlers AB vs. Integrum AB Series |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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