Correlation Between Citigroup and Svenska Cellulosa
Can any of the company-specific risk be diversified away by investing in both Citigroup and Svenska Cellulosa 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 Svenska Cellulosa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Svenska Cellulosa Aktiebolaget, you can compare the effects of market volatilities on Citigroup and Svenska Cellulosa 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 Svenska Cellulosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Svenska Cellulosa.
Diversification Opportunities for Citigroup and Svenska Cellulosa
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Svenska is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Svenska Cellulosa Aktiebolaget in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Cellulosa 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 Svenska Cellulosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Cellulosa has no effect on the direction of Citigroup i.e., Citigroup and Svenska Cellulosa go up and down completely randomly.
Pair Corralation between Citigroup and Svenska Cellulosa
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.01 times more return on investment than Svenska Cellulosa. However, Citigroup is 1.01 times more volatile than Svenska Cellulosa Aktiebolaget. It trades about 0.12 of its potential returns per unit of risk. Svenska Cellulosa Aktiebolaget is currently generating about 0.0 per unit of risk. If you would invest 3,936 in Citigroup on August 29, 2024 and sell it today you would earn a total of 3,080 from holding Citigroup or generate 78.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.36% |
| Values | Daily Returns |
Citigroup vs. Svenska Cellulosa Aktiebolaget
Performance |
| Timeline |
| Citigroup |
| Svenska Cellulosa |
Citigroup and Svenska Cellulosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Svenska Cellulosa
The main advantage of trading using opposite Citigroup and Svenska Cellulosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Svenska Cellulosa 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 Svenska Cellulosa will offset losses from the drop in Svenska Cellulosa's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Svenska Cellulosa vs. Svenska Cellulosa Aktiebolaget | Svenska Cellulosa vs. Holmen AB | Svenska Cellulosa vs. Industrivarden AB ser | Svenska Cellulosa vs. Stora Enso Oyj |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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