Correlation Between Citigroup and Serum
Can any of the company-specific risk be diversified away by investing in both Citigroup and Serum 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 Serum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Serum, you can compare the effects of market volatilities on Citigroup and Serum 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 Serum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Serum.
Diversification Opportunities for Citigroup and Serum
Very weak diversification
The 3 months correlation between Citigroup and Serum is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Serum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serum 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 Serum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serum has no effect on the direction of Citigroup i.e., Citigroup and Serum go up and down completely randomly.
Pair Corralation between Citigroup and Serum
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.19 times more return on investment than Serum. However, Citigroup is 5.19 times less risky than Serum. It trades about 0.06 of its potential returns per unit of risk. Serum is currently generating about -0.07 per unit of risk. If you would invest 4,733 in Citigroup on August 27, 2024 and sell it today you would earn a total of 2,251 from holding Citigroup or generate 47.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 56.04% |
| Values | Daily Returns |
Citigroup vs. Serum
Performance |
| Timeline |
| Citigroup |
| Serum |
Citigroup and Serum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Serum
The main advantage of trading using opposite Citigroup and Serum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Serum 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 Serum will offset losses from the drop in Serum's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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