Correlation Between Citigroup and Salmon Evolution
Can any of the company-specific risk be diversified away by investing in both Citigroup and Salmon Evolution 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 Salmon Evolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Salmon Evolution Holding, you can compare the effects of market volatilities on Citigroup and Salmon Evolution 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 Salmon Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Salmon Evolution.
Diversification Opportunities for Citigroup and Salmon Evolution
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citigroup and Salmon is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Salmon Evolution Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salmon Evolution Holding 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 Salmon Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salmon Evolution Holding has no effect on the direction of Citigroup i.e., Citigroup and Salmon Evolution go up and down completely randomly.
Pair Corralation between Citigroup and Salmon Evolution
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.92 times more return on investment than Salmon Evolution. However, Citigroup is 1.09 times less risky than Salmon Evolution. It trades about 0.08 of its potential returns per unit of risk. Salmon Evolution Holding is currently generating about -0.02 per unit of risk. If you would invest 4,112 in Citigroup on September 5, 2024 and sell it today you would earn a total of 3,030 from holding Citigroup or generate 73.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Citigroup vs. Salmon Evolution Holding
Performance |
| Timeline |
| Citigroup |
| Salmon Evolution Holding |
Citigroup and Salmon Evolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Salmon Evolution
The main advantage of trading using opposite Citigroup and Salmon Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Salmon Evolution 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 Salmon Evolution will offset losses from the drop in Salmon Evolution's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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