Correlation Between Citigroup and Sustainable Development
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sustainable Development 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 Sustainable Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sustainable Development Acquisition, you can compare the effects of market volatilities on Citigroup and Sustainable Development 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 Sustainable Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sustainable Development.
Diversification Opportunities for Citigroup and Sustainable Development
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Sustainable is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sustainable Development Acquis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sustainable Development 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 Sustainable Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sustainable Development has no effect on the direction of Citigroup i.e., Citigroup and Sustainable Development go up and down completely randomly.
Pair Corralation between Citigroup and Sustainable Development
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.06 times more return on investment than Sustainable Development. However, Citigroup is 3.06 times more volatile than Sustainable Development Acquisition. It trades about 0.07 of its potential returns per unit of risk. Sustainable Development Acquisition is currently generating about 0.04 per unit of risk. If you would invest 4,206 in Citigroup on August 26, 2024 and sell it today you would earn a total of 2,778 from holding Citigroup or generate 66.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 31.59% |
| Values | Daily Returns |
Citigroup vs. Sustainable Development Acquis
Performance |
| Timeline |
| Citigroup |
| Sustainable Development |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and Sustainable Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sustainable Development
The main advantage of trading using opposite Citigroup and Sustainable Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sustainable Development 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 Sustainable Development will offset losses from the drop in Sustainable Development'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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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