Correlation Between Citigroup and STANDARD CHARTUNSPADR2
Can any of the company-specific risk be diversified away by investing in both Citigroup and STANDARD CHARTUNSPADR2 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 STANDARD CHARTUNSPADR2 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and STANDARD CHARTUNSPADR2, you can compare the effects of market volatilities on Citigroup and STANDARD CHARTUNSPADR2 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 STANDARD CHARTUNSPADR2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and STANDARD CHARTUNSPADR2.
Diversification Opportunities for Citigroup and STANDARD CHARTUNSPADR2
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and STANDARD is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and STANDARD CHARTUNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STANDARD CHARTUNSPADR2 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 STANDARD CHARTUNSPADR2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STANDARD CHARTUNSPADR2 has no effect on the direction of Citigroup i.e., Citigroup and STANDARD CHARTUNSPADR2 go up and down completely randomly.
Pair Corralation between Citigroup and STANDARD CHARTUNSPADR2
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.58 times more return on investment than STANDARD CHARTUNSPADR2. However, Citigroup is 1.71 times less risky than STANDARD CHARTUNSPADR2. It trades about 0.18 of its potential returns per unit of risk. STANDARD CHARTUNSPADR2 is currently generating about 0.09 per unit of risk. If you would invest 6,980 in Citigroup on September 12, 2024 and sell it today you would earn a total of 224.00 from holding Citigroup or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. STANDARD CHARTUNSPADR2
Performance |
| Timeline |
| Citigroup |
| STANDARD CHARTUNSPADR2 |
Citigroup and STANDARD CHARTUNSPADR2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and STANDARD CHARTUNSPADR2
The main advantage of trading using opposite Citigroup and STANDARD CHARTUNSPADR2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, STANDARD CHARTUNSPADR2 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 STANDARD CHARTUNSPADR2 will offset losses from the drop in STANDARD CHARTUNSPADR2's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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