Correlation Between Citigroup and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Citigroup and Strategic Investments 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 Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Strategic Investments AS, you can compare the effects of market volatilities on Citigroup and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Strategic Investments.
Diversification Opportunities for Citigroup and Strategic Investments
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Strategic is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Citigroup i.e., Citigroup and Strategic Investments go up and down completely randomly.
Pair Corralation between Citigroup and Strategic Investments
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.43 times more return on investment than Strategic Investments. However, Citigroup is 2.35 times less risky than Strategic Investments. It trades about 0.23 of its potential returns per unit of risk. Strategic Investments AS is currently generating about 0.05 per unit of risk. If you would invest 6,360 in Citigroup on August 27, 2024 and sell it today you would earn a total of 624.00 from holding Citigroup or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Strategic Investments AS
Performance |
| Timeline |
| Citigroup |
| Strategic Investments |
Citigroup and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Strategic Investments
The main advantage of trading using opposite Citigroup and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Strategic Investments vs. Newcap Holding AS | Strategic Investments vs. SKAKO AS | Strategic Investments vs. Rovsing AS |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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