Correlation Between Citigroup and Safello Group
Can any of the company-specific risk be diversified away by investing in both Citigroup and Safello Group 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 Safello Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Safello Group AB, you can compare the effects of market volatilities on Citigroup and Safello Group 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 Safello Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Safello Group.
Diversification Opportunities for Citigroup and Safello Group
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Safello is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Safello Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safello Group AB 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 Safello Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safello Group AB has no effect on the direction of Citigroup i.e., Citigroup and Safello Group go up and down completely randomly.
Pair Corralation between Citigroup and Safello Group
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.02 times less return on investment than Safello Group. But when comparing it to its historical volatility, Citigroup is 3.41 times less risky than Safello Group. It trades about 0.07 of its potential returns per unit of risk. Safello Group AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 399.00 in Safello Group AB on September 3, 2024 and sell it today you would earn a total of 203.00 from holding Safello Group AB or generate 50.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.4% |
| Values | Daily Returns |
Citigroup vs. Safello Group AB
Performance |
| Timeline |
| Citigroup |
| Safello Group AB |
Citigroup and Safello Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Safello Group
The main advantage of trading using opposite Citigroup and Safello Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Safello Group 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 Safello Group will offset losses from the drop in Safello Group's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Safello Group vs. Goobit Group AB | Safello Group vs. CoinShares International | Safello Group vs. Zignsec AB | Safello Group vs. Checkin Group AB |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |