Correlation Between Citigroup and Sebata Holdings
Can any of the company-specific risk be diversified away by investing in both Citigroup and Sebata Holdings 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 Sebata Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Sebata Holdings, you can compare the effects of market volatilities on Citigroup and Sebata Holdings 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 Sebata Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Sebata Holdings.
Diversification Opportunities for Citigroup and Sebata Holdings
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and Sebata is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Sebata Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sebata Holdings 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 Sebata Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sebata Holdings has no effect on the direction of Citigroup i.e., Citigroup and Sebata Holdings go up and down completely randomly.
Pair Corralation between Citigroup and Sebata Holdings
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.45 times more return on investment than Sebata Holdings. However, Citigroup is 2.2 times less risky than Sebata Holdings. It trades about 0.21 of its potential returns per unit of risk. Sebata Holdings is currently generating about 0.02 per unit of risk. If you would invest 6,393 in Citigroup on August 31, 2024 and sell it today you would earn a total of 623.00 from holding Citigroup or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Sebata Holdings
Performance |
| Timeline |
| Citigroup |
| Sebata Holdings |
Citigroup and Sebata Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Sebata Holdings
The main advantage of trading using opposite Citigroup and Sebata Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Sebata Holdings 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 Sebata Holdings will offset losses from the drop in Sebata Holdings' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Sebata Holdings vs. CA Sales Holdings | Sebata Holdings vs. Trematon Capital Investments | Sebata Holdings vs. Afine Investments | Sebata Holdings vs. Deneb Investments |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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