Correlation Between Citigroup and Titan Machinery
Can any of the company-specific risk be diversified away by investing in both Citigroup and Titan Machinery 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 Titan Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Titan Machinery, you can compare the effects of market volatilities on Citigroup and Titan Machinery 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 Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Titan Machinery.
Diversification Opportunities for Citigroup and Titan Machinery
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Titan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery 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 Titan Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Machinery has no effect on the direction of Citigroup i.e., Citigroup and Titan Machinery go up and down completely randomly.
Pair Corralation between Citigroup and Titan Machinery
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.54 times more return on investment than Titan Machinery. However, Citigroup is 1.86 times less risky than Titan Machinery. It trades about 0.25 of its potential returns per unit of risk. Titan Machinery is currently generating about 0.09 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 715.00 from holding Citigroup or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Titan Machinery
Performance |
| Timeline |
| Citigroup |
| Titan Machinery |
Citigroup and Titan Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Titan Machinery
The main advantage of trading using opposite Citigroup and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Titan Machinery 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 Titan Machinery will offset losses from the drop in Titan Machinery's long position.| Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal | Citigroup vs. Bank of Nova |
| Titan Machinery vs. Global Industrial Co | Titan Machinery vs. WESCO International | Titan Machinery vs. MSC Industrial Direct |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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