Correlation Between Citigroup and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sachem Capital 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 Sachem Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sachem Capital Corp, you can compare the effects of market volatilities on Citigroup and Sachem Capital 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 Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sachem Capital.
Diversification Opportunities for Citigroup and Sachem Capital
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Sachem is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp 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 Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of Citigroup i.e., Citigroup and Sachem Capital go up and down completely randomly.
Pair Corralation between Citigroup and Sachem Capital
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.69 times more return on investment than Sachem Capital. However, Citigroup is 1.46 times less risky than Sachem Capital. It trades about 0.07 of its potential returns per unit of risk. Sachem Capital Corp is currently generating about -0.03 per unit of risk. If you would invest 4,117 in Citigroup on August 28, 2024 and sell it today you would earn a total of 2,958 from holding Citigroup or generate 71.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Sachem Capital Corp
Performance |
| Timeline |
| Citigroup |
| Sachem Capital Corp |
Citigroup and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sachem Capital
The main advantage of trading using opposite Citigroup and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sachem Capital 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 Sachem Capital will offset losses from the drop in Sachem Capital's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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