Correlation Between Citigroup and TREECOM
Can any of the company-specific risk be diversified away by investing in both Citigroup and TREECOM 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 TREECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and TREECOM, you can compare the effects of market volatilities on Citigroup and TREECOM 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 TREECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and TREECOM.
Diversification Opportunities for Citigroup and TREECOM
Excellent diversification
The 3 months correlation between Citigroup and TREECOM is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and TREECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TREECOM 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 TREECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TREECOM has no effect on the direction of Citigroup i.e., Citigroup and TREECOM go up and down completely randomly.
Pair Corralation between Citigroup and TREECOM
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.21 times more return on investment than TREECOM. However, Citigroup is 4.79 times less risky than TREECOM. It trades about 0.18 of its potential returns per unit of risk. TREECOM is currently generating about -0.21 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 Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citigroup vs. TREECOM
Performance |
| Timeline |
| Citigroup |
| TREECOM |
Citigroup and TREECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and TREECOM
The main advantage of trading using opposite Citigroup and TREECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, TREECOM 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 TREECOM will offset losses from the drop in TREECOM's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| TREECOM vs. DATAGROUP SE | TREECOM vs. GALENA MINING LTD | TREECOM vs. MINCO SILVER | TREECOM vs. Zijin Mining Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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