Correlation Between Citigroup and Sano Brunos
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sano Brunos 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 Sano Brunos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sano Brunos Enterprises, you can compare the effects of market volatilities on Citigroup and Sano Brunos 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 Sano Brunos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sano Brunos.
Diversification Opportunities for Citigroup and Sano Brunos
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Sano is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sano Brunos Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sano Brunos Enterprises 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 Sano Brunos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sano Brunos Enterprises has no effect on the direction of Citigroup i.e., Citigroup and Sano Brunos go up and down completely randomly.
Pair Corralation between Citigroup and Sano Brunos
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.29 times less return on investment than Sano Brunos. But when comparing it to its historical volatility, Citigroup is 1.25 times less risky than Sano Brunos. It trades about 0.09 of its potential returns per unit of risk. Sano Brunos Enterprises is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,089,498 in Sano Brunos Enterprises on August 28, 2024 and sell it today you would earn a total of 1,230,502 from holding Sano Brunos Enterprises or generate 58.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.4% |
| Values | Daily Returns |
Citigroup vs. Sano Brunos Enterprises
Performance |
| Timeline |
| Citigroup |
| Sano Brunos Enterprises |
Citigroup and Sano Brunos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sano Brunos
The main advantage of trading using opposite Citigroup and Sano Brunos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sano Brunos 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 Sano Brunos will offset losses from the drop in Sano Brunos' long position.The idea behind Citigroup and Sano Brunos Enterprises pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sano Brunos vs. Rami Levi | Sano Brunos vs. Shufersal | Sano Brunos vs. Strauss Group | Sano Brunos vs. Kerur 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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