Correlation Between Citigroup and Starco Brands
Can any of the company-specific risk be diversified away by investing in both Citigroup and Starco Brands 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 Starco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Starco Brands, you can compare the effects of market volatilities on Citigroup and Starco Brands 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 Starco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Starco Brands.
Diversification Opportunities for Citigroup and Starco Brands
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citigroup and Starco is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Starco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starco Brands 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 Starco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starco Brands has no effect on the direction of Citigroup i.e., Citigroup and Starco Brands go up and down completely randomly.
Pair Corralation between Citigroup and Starco Brands
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.1 times less return on investment than Starco Brands. But when comparing it to its historical volatility, Citigroup is 4.69 times less risky than Starco Brands. It trades about 0.07 of its potential returns per unit of risk. Starco Brands is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Starco Brands on August 31, 2024 and sell it today you would lose (8.00) from holding Starco Brands or give up 57.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Citigroup vs. Starco Brands
Performance |
| Timeline |
| Citigroup |
| Starco Brands |
Citigroup and Starco Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Starco Brands
The main advantage of trading using opposite Citigroup and Starco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Starco Brands 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 Starco Brands will offset losses from the drop in Starco Brands' long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Starco Brands vs. Porsche Automobile Holding | Starco Brands vs. Ferrari NV | Starco Brands vs. Toyota Motor | Starco Brands vs. General Motors |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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