Correlation Between Citigroup and Arcadia Biosciences
Can any of the company-specific risk be diversified away by investing in both Citigroup and Arcadia Biosciences 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 Arcadia Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Arcadia Biosciences, you can compare the effects of market volatilities on Citigroup and Arcadia Biosciences 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 Arcadia Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Arcadia Biosciences.
Diversification Opportunities for Citigroup and Arcadia Biosciences
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citigroup and Arcadia is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Arcadia Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcadia Biosciences 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 Arcadia Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcadia Biosciences has no effect on the direction of Citigroup i.e., Citigroup and Arcadia Biosciences go up and down completely randomly.
Pair Corralation between Citigroup and Arcadia Biosciences
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.28 times more return on investment than Arcadia Biosciences. However, Citigroup is 3.56 times less risky than Arcadia Biosciences. It trades about 0.21 of its potential returns per unit of risk. Arcadia Biosciences is currently generating about -0.33 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. Arcadia Biosciences
Performance |
| Timeline |
| Citigroup |
| Arcadia Biosciences |
Citigroup and Arcadia Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Arcadia Biosciences
The main advantage of trading using opposite Citigroup and Arcadia Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Arcadia Biosciences 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 Arcadia Biosciences will offset losses from the drop in Arcadia Biosciences' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Arcadia Biosciences vs. Better Choice | Arcadia Biosciences vs. Stryve Foods | Arcadia Biosciences vs. Koios Beverage Corp | Arcadia Biosciences vs. Bit Origin |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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