Correlation Between Citigroup and Rekor Systems
Can any of the company-specific risk be diversified away by investing in both Citigroup and Rekor Systems 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 Rekor Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Rekor Systems, you can compare the effects of market volatilities on Citigroup and Rekor Systems 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 Rekor Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Rekor Systems.
Diversification Opportunities for Citigroup and Rekor Systems
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Rekor is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Rekor Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rekor Systems 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 Rekor Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rekor Systems has no effect on the direction of Citigroup i.e., Citigroup and Rekor Systems go up and down completely randomly.
Pair Corralation between Citigroup and Rekor Systems
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.36 times more return on investment than Rekor Systems. However, Citigroup is 2.74 times less risky than Rekor Systems. It trades about 0.21 of its potential returns per unit of risk. Rekor Systems is currently generating about -0.05 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Rekor Systems
Performance |
| Timeline |
| Citigroup |
| Rekor Systems |
Citigroup and Rekor Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Rekor Systems
The main advantage of trading using opposite Citigroup and Rekor Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Rekor Systems 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 Rekor Systems will offset losses from the drop in Rekor Systems' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Rekor Systems vs. Aurora Mobile | Rekor Systems vs. Arqit Quantum | Rekor Systems vs. Bridgeline Digital | Rekor Systems vs. Repay Holdings Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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