Correlation Between Citigroup and Turnkey Communication
Can any of the company-specific risk be diversified away by investing in both Citigroup and Turnkey Communication 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 Turnkey Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Turnkey Communication Services, you can compare the effects of market volatilities on Citigroup and Turnkey Communication 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 Turnkey Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Turnkey Communication.
Diversification Opportunities for Citigroup and Turnkey Communication
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Turnkey is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Turnkey Communication Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turnkey Communication 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 Turnkey Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turnkey Communication has no effect on the direction of Citigroup i.e., Citigroup and Turnkey Communication go up and down completely randomly.
Pair Corralation between Citigroup and Turnkey Communication
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.51 times more return on investment than Turnkey Communication. However, Citigroup is 1.95 times less risky than Turnkey Communication. It trades about 0.12 of its potential returns per unit of risk. Turnkey Communication Services is currently generating about -0.01 per unit of risk. If you would invest 4,325 in Citigroup on August 24, 2024 and sell it today you would earn a total of 2,690 from holding Citigroup or generate 62.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.4% |
| Values | Daily Returns |
Citigroup vs. Turnkey Communication Services
Performance |
| Timeline |
| Citigroup |
| Turnkey Communication |
Citigroup and Turnkey Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Turnkey Communication
The main advantage of trading using opposite Citigroup and Turnkey Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Turnkey Communication 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 Turnkey Communication will offset losses from the drop in Turnkey Communication's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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