Correlation Between Citigroup and Top Frontier
Can any of the company-specific risk be diversified away by investing in both Citigroup and Top Frontier 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 Top Frontier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Top Frontier Investment, you can compare the effects of market volatilities on Citigroup and Top Frontier 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 Top Frontier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Top Frontier.
Diversification Opportunities for Citigroup and Top Frontier
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Top is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Top Frontier Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Frontier Investment 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 Top Frontier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Frontier Investment has no effect on the direction of Citigroup i.e., Citigroup and Top Frontier go up and down completely randomly.
Pair Corralation between Citigroup and Top Frontier
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.51 times more return on investment than Top Frontier. However, Citigroup is 1.98 times less risky than Top Frontier. It trades about 0.4 of its potential returns per unit of risk. Top Frontier Investment is currently generating about 0.12 per unit of risk. If you would invest 6,977 in Citigroup on October 22, 2024 and sell it today you would earn a total of 1,022 from holding Citigroup or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Citigroup vs. Top Frontier Investment
Performance |
| Timeline |
| Citigroup |
| Top Frontier Investment |
Citigroup and Top Frontier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Top Frontier
The main advantage of trading using opposite Citigroup and Top Frontier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Top Frontier 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 Top Frontier will offset losses from the drop in Top Frontier's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Top Frontier vs. East West Banking | Top Frontier vs. Metropolitan Bank Trust | Top Frontier vs. BDO Unibank | Top Frontier vs. Apex Mining Co |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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