Correlation Between Citigroup and Spirit Of
Can any of the company-specific risk be diversified away by investing in both Citigroup and Spirit Of 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 Spirit Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Spirit Of America, you can compare the effects of market volatilities on Citigroup and Spirit Of 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 Spirit Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Spirit Of.
Diversification Opportunities for Citigroup and Spirit Of
Very good diversification
The 3 months correlation between Citigroup and Spirit is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Spirit Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Of America 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 Spirit Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirit Of America has no effect on the direction of Citigroup i.e., Citigroup and Spirit Of go up and down completely randomly.
Pair Corralation between Citigroup and Spirit Of
Taking into account the 90-day investment horizon Citigroup is expected to generate 12.83 times more return on investment than Spirit Of. However, Citigroup is 12.83 times more volatile than Spirit Of America. It trades about 0.08 of its potential returns per unit of risk. Spirit Of America is currently generating about 0.14 per unit of risk. If you would invest 5,992 in Citigroup on September 2, 2024 and sell it today you would earn a total of 1,095 from holding Citigroup or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Spirit Of America
Performance |
| Timeline |
| Citigroup |
| Spirit Of America |
Citigroup and Spirit Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Spirit Of
The main advantage of trading using opposite Citigroup and Spirit Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Spirit Of 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 Spirit Of will offset losses from the drop in Spirit Of's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Spirit Of vs. Spirit Of America | Spirit Of vs. Spirit Of America | Spirit Of vs. Spirit Of America | Spirit Of vs. Spirit Of America |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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