Correlation Between Citigroup and Cartesian Growth
Can any of the company-specific risk be diversified away by investing in both Citigroup and Cartesian Growth 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 Cartesian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Cartesian Growth, you can compare the effects of market volatilities on Citigroup and Cartesian Growth 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 Cartesian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Cartesian Growth.
Diversification Opportunities for Citigroup and Cartesian Growth
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Cartesian is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Cartesian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartesian Growth 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 Cartesian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartesian Growth has no effect on the direction of Citigroup i.e., Citigroup and Cartesian Growth go up and down completely randomly.
Pair Corralation between Citigroup and Cartesian Growth
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.36 times more return on investment than Cartesian Growth. However, Citigroup is 2.81 times less risky than Cartesian Growth. It trades about 0.07 of its potential returns per unit of risk. Cartesian Growth is currently generating about -0.05 per unit of risk. If you would invest 4,134 in Citigroup on August 30, 2024 and sell it today you would earn a total of 2,882 from holding Citigroup or generate 69.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Cartesian Growth
Performance |
| Timeline |
| Citigroup |
| Cartesian Growth |
Citigroup and Cartesian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Cartesian Growth
The main advantage of trading using opposite Citigroup and Cartesian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Cartesian Growth 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 Cartesian Growth will offset losses from the drop in Cartesian Growth's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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