Correlation Between Citigroup and Step One
Can any of the company-specific risk be diversified away by investing in both Citigroup and Step One 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 Step One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Step One Clothing, you can compare the effects of market volatilities on Citigroup and Step One 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 Step One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Step One.
Diversification Opportunities for Citigroup and Step One
Very good diversification
The 3 months correlation between Citigroup and Step is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Step One Clothing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Step One Clothing 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 Step One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Step One Clothing has no effect on the direction of Citigroup i.e., Citigroup and Step One go up and down completely randomly.
Pair Corralation between Citigroup and Step One
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.74 times more return on investment than Step One. However, Citigroup is 1.35 times less risky than Step One. It trades about 0.18 of its potential returns per unit of risk. Step One Clothing is currently generating about -0.13 per unit of risk. If you would invest 6,148 in Citigroup on November 1, 2024 and sell it today you would earn a total of 1,846 from holding Citigroup or generate 30.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.78% |
| Values | Daily Returns |
Citigroup vs. Step One Clothing
Performance |
| Timeline |
| Citigroup |
| Step One Clothing |
Citigroup and Step One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Step One
The main advantage of trading using opposite Citigroup and Step One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Step One 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 Step One will offset losses from the drop in Step One's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Step One vs. BSP Financial Group | Step One vs. Bisalloy Steel Group | Step One vs. Qbe Insurance Group | Step One vs. Iron Road |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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