Correlation Between Citigroup and Roivant Sciences
Can any of the company-specific risk be diversified away by investing in both Citigroup and Roivant Sciences 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 Roivant Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Roivant Sciences, you can compare the effects of market volatilities on Citigroup and Roivant Sciences 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 Roivant Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Roivant Sciences.
Diversification Opportunities for Citigroup and Roivant Sciences
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Roivant is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Roivant Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roivant Sciences 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 Roivant Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roivant Sciences has no effect on the direction of Citigroup i.e., Citigroup and Roivant Sciences go up and down completely randomly.
Pair Corralation between Citigroup and Roivant Sciences
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 Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Citigroup vs. Roivant Sciences
Performance |
| Timeline |
| Citigroup |
| Roivant Sciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Roivant Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Roivant Sciences
The main advantage of trading using opposite Citigroup and Roivant Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Roivant Sciences 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 Roivant Sciences will offset losses from the drop in Roivant Sciences' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Roivant Sciences vs. Roivant Sciences | Roivant Sciences vs. Jasper Therapeutics | Roivant Sciences vs. Humacyte | Roivant Sciences vs. Reviva Pharmaceuticals 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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