Correlation Between Citigroup and Terex
Can any of the company-specific risk be diversified away by investing in both Citigroup and Terex 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 Terex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Terex, you can compare the effects of market volatilities on Citigroup and Terex 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 Terex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Terex.
Diversification Opportunities for Citigroup and Terex
Modest diversification
The 3 months correlation between Citigroup and Terex is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Terex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terex 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 Terex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terex has no effect on the direction of Citigroup i.e., Citigroup and Terex go up and down completely randomly.
Pair Corralation between Citigroup and Terex
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.65 times more return on investment than Terex. However, Citigroup is 1.55 times less risky than Terex. It trades about 0.21 of its potential returns per unit of risk. Terex is currently generating about 0.02 per unit of risk. If you would invest 6,255 in Citigroup on August 24, 2024 and sell it today you would earn a total of 640.00 from holding Citigroup or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Terex
Performance |
| Timeline |
| Citigroup |
| Terex |
Citigroup and Terex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Terex
The main advantage of trading using opposite Citigroup and Terex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Terex 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 Terex will offset losses from the drop in Terex's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Terex vs. Oshkosh | Terex vs. Astec Industries | Terex vs. Hyster Yale Materials Handling | Terex vs. Manitex International |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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