Correlation Between Citigroup and SRH Total
Can any of the company-specific risk be diversified away by investing in both Citigroup and SRH Total 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 SRH Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and SRH Total Return, you can compare the effects of market volatilities on Citigroup and SRH Total 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 SRH Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and SRH Total.
Diversification Opportunities for Citigroup and SRH Total
Almost no diversification
The 3 months correlation between Citigroup and SRH is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and SRH Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SRH Total Return 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 SRH Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SRH Total Return has no effect on the direction of Citigroup i.e., Citigroup and SRH Total go up and down completely randomly.
Pair Corralation between Citigroup and SRH Total
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.04 times more return on investment than SRH Total. However, Citigroup is 2.04 times more volatile than SRH Total Return. It trades about 0.08 of its potential returns per unit of risk. SRH Total Return is currently generating about 0.11 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. SRH Total Return
Performance |
| Timeline |
| Citigroup |
| SRH Total Return |
Citigroup and SRH Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and SRH Total
The main advantage of trading using opposite Citigroup and SRH Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, SRH Total 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 SRH Total will offset losses from the drop in SRH Total's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| SRH Total vs. Blackrock Floating Rate | SRH Total vs. Eaton Vance Senior | SRH Total vs. Eaton Vance Senior | SRH Total vs. Blackrock Debt Strategies |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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