Correlation Between Citigroup and SC Asset
Can any of the company-specific risk be diversified away by investing in both Citigroup and SC Asset 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 SC Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and SC Asset, you can compare the effects of market volatilities on Citigroup and SC Asset 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 SC Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and SC Asset.
Diversification Opportunities for Citigroup and SC Asset
Average diversification
The 3 months correlation between Citigroup and SC Asset is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SC Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SC Asset 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 SC Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SC Asset has no effect on the direction of Citigroup i.e., Citigroup and SC Asset go up and down completely randomly.
Pair Corralation between Citigroup and SC Asset
Taking into account the 90-day investment horizon Citigroup is expected to generate 13.98 times less return on investment than SC Asset. But when comparing it to its historical volatility, Citigroup is 37.27 times less risky than SC Asset. It trades about 0.15 of its potential returns per unit of risk. SC Asset is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 317.00 in SC Asset on August 26, 2024 and sell it today you would lose (27.00) from holding SC Asset or give up 8.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.04% |
| Values | Daily Returns |
Citigroup vs. SC Asset
Performance |
| Timeline |
| Citigroup |
| SC Asset |
Citigroup and SC Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and SC Asset
The main advantage of trading using opposite Citigroup and SC Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, SC Asset 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 SC Asset will offset losses from the drop in SC Asset's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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