Correlation Between Citigroup and Sana Biotechnology
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sana Biotechnology 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 Sana Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sana Biotechnology, you can compare the effects of market volatilities on Citigroup and Sana Biotechnology 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 Sana Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sana Biotechnology.
Diversification Opportunities for Citigroup and Sana Biotechnology
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Sana is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sana Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sana Biotechnology 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 Sana Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sana Biotechnology has no effect on the direction of Citigroup i.e., Citigroup and Sana Biotechnology go up and down completely randomly.
Pair Corralation between Citigroup and Sana Biotechnology
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.36 times more return on investment than Sana Biotechnology. However, Citigroup is 2.75 times less risky than Sana Biotechnology. It trades about 0.26 of its potential returns per unit of risk. Sana Biotechnology is currently generating about -0.16 per unit of risk. If you would invest 6,361 in Citigroup on September 1, 2024 and sell it today you would earn a total of 726.00 from holding Citigroup or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Sana Biotechnology
Performance |
| Timeline |
| Citigroup |
| Sana Biotechnology |
Citigroup and Sana Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sana Biotechnology
The main advantage of trading using opposite Citigroup and Sana Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sana Biotechnology 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 Sana Biotechnology will offset losses from the drop in Sana Biotechnology'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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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