Correlation Between Citigroup and Spirent Communications
Can any of the company-specific risk be diversified away by investing in both Citigroup and Spirent Communications 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 Spirent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Spirent Communications plc, you can compare the effects of market volatilities on Citigroup and Spirent Communications 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 Spirent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Spirent Communications.
Diversification Opportunities for Citigroup and Spirent Communications
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citigroup and Spirent is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Spirent Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirent Communications 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 Spirent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirent Communications has no effect on the direction of Citigroup i.e., Citigroup and Spirent Communications go up and down completely randomly.
Pair Corralation between Citigroup and Spirent Communications
If you would invest 7,100 in Citigroup on October 25, 2024 and sell it today you would earn a total of 1,069 from holding Citigroup or generate 15.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Spirent Communications plc
Performance |
| Timeline |
| Citigroup |
| Spirent Communications |
Citigroup and Spirent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Spirent Communications
The main advantage of trading using opposite Citigroup and Spirent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Spirent Communications 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 Spirent Communications will offset losses from the drop in Spirent Communications' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Spirent Communications vs. Microsoft | Spirent Communications vs. Palo Alto Networks | Spirent Communications vs. Uipath Inc | Spirent Communications vs. BLOCK 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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