Correlation Between Citigroup and MERLIN DIAMONDS
Can any of the company-specific risk be diversified away by investing in both Citigroup and MERLIN DIAMONDS 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 MERLIN DIAMONDS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and MERLIN DIAMONDS, you can compare the effects of market volatilities on Citigroup and MERLIN DIAMONDS 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 MERLIN DIAMONDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and MERLIN DIAMONDS.
Diversification Opportunities for Citigroup and MERLIN DIAMONDS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and MERLIN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and MERLIN DIAMONDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MERLIN DIAMONDS 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 MERLIN DIAMONDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MERLIN DIAMONDS has no effect on the direction of Citigroup i.e., Citigroup and MERLIN DIAMONDS go up and down completely randomly.
Pair Corralation between Citigroup and MERLIN DIAMONDS
If you would invest 6,209 in Citigroup on October 15, 2024 and sell it today you would earn a total of 1,068 from holding Citigroup or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Citigroup vs. MERLIN DIAMONDS
Performance |
| Timeline |
| Citigroup |
| MERLIN DIAMONDS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and MERLIN DIAMONDS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and MERLIN DIAMONDS
The main advantage of trading using opposite Citigroup and MERLIN DIAMONDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, MERLIN DIAMONDS 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 MERLIN DIAMONDS will offset losses from the drop in MERLIN DIAMONDS's long position.| Citigroup vs. Nu Holdings | Citigroup vs. Canadian Imperial Bank | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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