Correlation Between Citigroup and SP Plus
Can any of the company-specific risk be diversified away by investing in both Citigroup and SP Plus 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 SP Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and SP Plus Corp, you can compare the effects of market volatilities on Citigroup and SP Plus 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 SP Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and SP Plus.
Diversification Opportunities for Citigroup and SP Plus
Very poor diversification
The 3 months correlation between Citigroup and SP Plus is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SP Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Plus Corp 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 SP Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Plus Corp has no effect on the direction of Citigroup i.e., Citigroup and SP Plus go up and down completely randomly.
Pair Corralation between Citigroup and SP Plus
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.28 times more return on investment than SP Plus. However, Citigroup is 1.28 times more volatile than SP Plus Corp. It trades about 0.08 of its potential returns per unit of risk. SP Plus Corp is currently generating about -0.01 per unit of risk. If you would invest 4,525 in Citigroup on August 31, 2024 and sell it today you would earn a total of 2,562 from holding Citigroup or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 8.56% |
| Values | Daily Returns |
Citigroup vs. SP Plus Corp
Performance |
| Timeline |
| Citigroup |
| SP Plus Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citigroup and SP Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and SP Plus
The main advantage of trading using opposite Citigroup and SP Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, SP Plus 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 SP Plus will offset losses from the drop in SP Plus' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| SP Plus vs. Cass Information Systems | SP Plus vs. First Advantage Corp | SP Plus vs. Rentokil Initial PLC | SP Plus vs. CBIZ Inc |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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