Correlation Between Citigroup and Gentherm
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gentherm 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 Gentherm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Gentherm, you can compare the effects of market volatilities on Citigroup and Gentherm 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 Gentherm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gentherm.
Diversification Opportunities for Citigroup and Gentherm
Very good diversification
The 3 months correlation between Citigroup and Gentherm is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gentherm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentherm 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 Gentherm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentherm has no effect on the direction of Citigroup i.e., Citigroup and Gentherm go up and down completely randomly.
Pair Corralation between Citigroup and Gentherm
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.34 times more return on investment than Gentherm. However, Citigroup is 1.34 times more volatile than Gentherm. It trades about 0.25 of its potential returns per unit of risk. Gentherm is currently generating about 0.16 per unit of risk. If you would invest 6,360 in Citigroup on August 28, 2024 and sell it today you would earn a total of 715.00 from holding Citigroup or generate 11.24% 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. Gentherm
Performance |
| Timeline |
| Citigroup |
| Gentherm |
Citigroup and Gentherm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gentherm
The main advantage of trading using opposite Citigroup and Gentherm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gentherm 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 Gentherm will offset losses from the drop in Gentherm's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Gentherm vs. Monro Muffler Brake | Gentherm vs. Motorcar Parts of | Gentherm vs. Standard Motor Products | Gentherm vs. Stoneridge |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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